ONGC and Shell Energy India Forge Strategic Alliance for Deepwater Exploration and LNG Sourcing

New Delhi, India – In a significant move set to bolster India’s energy security and exploration capabilities, Oil and Natural Gas Corp (ONGC) and Shell Energy India Private Ltd have officially signed a non-binding Memorandum of Understanding (MoU). This landmark agreement, executed on August 10, lays the groundwork for a comprehensive exploration of joint opportunities in deepwater and ultra-deepwater oil and gas exploration, as well as crucial Liquefied Natural Gas (LNG) sourcing.

The MoU, while not committing either company to specific investments or projects at this nascent stage, establishes a robust framework for assessing potential collaborative ventures across India’s dynamic energy landscape. The partnership aims to leverage the distinct strengths of both entities: ONGC’s formidable position as India’s leading oil and gas explorer and Shell’s extensive global expertise in upstream exploration and LNG.

Focus on Deepwater Exploration to Unlock India’s Potential

A primary pillar of this collaboration revolves around the exploration of deepwater and ultra-deepwater offshore blocks. ONGC and Shell Energy India will jointly consider participation in blocks offered under the government’s forward-looking Open Acreage Licensing Policy (OALP), including the currently ongoing OALP Rounds X and XI, as well as future bidding rounds. This initiative aligns with the broader impetus of the “Samudra Manthan” program, designed to accelerate the exploration of India’s vast offshore resources.

Beyond new acreage, the agreement also opens avenues for examining farm-in and farm-out arrangements involving ONGC’s existing OALP blocks. This strategy will enable both companies to strategically optimize their portfolios and bring in additional technical expertise where needed. The collaboration underscores India’s commitment to attracting international investment and advanced technological know-how into its deepwater and ultra-deepwater acreage, areas that hold significant untapped potential.

This partnership with Shell is not an isolated event but part of a strategic drive by ONGC to forge alliances with international majors. In August 2022, ONGC signed a Heads of Agreement with ExxonMobil for deepwater exploration along India’s eastern and western coasts. Similar memorandums have also been inked with other global giants, including Chevron, all aimed at enhancing India’s deepwater exploration program with world-class expertise.

LNG Sourcing: Powering India’s Transition to a Gas-Based Economy

The second critical area of cooperation outlined in the MoU is LNG sourcing. Recognizing India’s ambitious transition towards a stronger gas-based economy, the two companies will explore opportunities to collaborate on securing LNG supplies. This move is vital for increasing gas consumption, strengthening the availability of gas supplies, and ultimately enhancing India’s long-term energy security.

ONGC highlighted that by bringing together their complementary capabilities and global expertise, this collaboration seeks to create new synergies across the entire energy value chain. The anticipated outcomes include deeper exploration, greater energy availability, and a significant contribution to India’s energy future. “Exploring deeper. Collaborating stronger. Powering India’s energy future,” ONGC proclaimed in a post announcing the agreement, succinctly capturing the essence of this strategic partnership.

This MoU reflects a broader trend among Indian energy companies to secure additional domestic oil and gas resources while simultaneously expanding access to LNG. The goal is to build a more resilient and sustainable energy infrastructure that can meet the nation’s growing energy demands and support its economic aspirations.

The collaboration between ONGC and Shell Energy India represents a forward-thinking approach to addressing India’s energy challenges and harnessing its considerable offshore potential, paving the way for a more secure and diversified energy future.