Page 7 - AsianOil Week 41

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India’s energy sector attracts foreign partners
ExxonMobil has signed partnership MoUs with ONGC and IOC, while Total has agreed to buy a stake in Adani Gas
COMMENTARY
WHAT:
Foreign investors are expanding their presence in the country’s upstream and midstream.
WHY:
India’s burgeoning energy demand and upstream reforms are making it a compelling investment case.
WHAT NEXT:
More upstream partnerships are likely if the ONGC-ExxonMobil venture proves successful.
INDIA’S soaring energy demand and ongoing upstream reforms have drummed up fresh inter- est from the international community.
The country has been working for years to improve the investment case for its upstream oil and gas sector, which has struggled to attract outsiders. This has been a point of concern for the country’s energy planners, given dwindling production, a lack of major new discoveries to halt the slide in output and rising domestic energy consumption.
News, then, that ExxonMobil has agreed to team up with state-run Oil and Natural Gas Corp. (ONGC) to conduct joint technical studies in existing and prospective offshore blocks will have been music to New Delhi’s ears.
ONGC, the country’s flagship oil and gas producer, has been under mounting pressure from the central government for years to do more in terms of output. An estimated 75% of India’s 26 known sedimentary basins are underexplored, with only eight basins cur- rently in production.
National crude and condensate produc- tion declined from a peak of 38.08mn tonnes (765,000 barrels per day) in financial year 2011- 2012 to 34.20mn tonnes (687,000 bpd) in 2018- 2019, according to the Petroleum Planning & Analysis Cell (PPAC), a division of the Ministry
of Petroleum and Natural Gas. At the same time, oil product consumption has expanded from 148.13mn tonnes to 211.64mn tonnes. Needless to say, this has driven up imports, with the coun- try relying on foreign supplies for more than 80% of the oil it consumes.
At the same time, declines in gas production have seen the country grow to rely on imports for more than half its demand – a situation that has encouraged both ExxonMobil and France’s Total to seek out new opportunities in the lique- fied natural gas (LNG) space.
Exploring with Exxon
ONGC said on October 15 that it had signed a memorandum of understanding (MoU) with ExxonMobil on the sidelines of the third India Energy Forum by CERAWeek.
ONGC said the two companies would “undertake joint technical studies and co-op- erate in frontier areas like deep water and other petroleum exploration licence (PEL) blocks of ONGC in east and west coast and open acreage for joint bidding.”
The MoU outlines a three-phased approach to the partners’ endeavours and would “lead to a joint technical study for potential collaboration areas”, ONGC added.
Commenting on the agreement, ONGC
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