BG-ONGC-Reliance Industries, joint venture partners in the Panna-Mukta and Tapti (PMT) fields, have ‘in principle’ agreed to seek extension of the production sharing contract (PSC), which expires in 2019.
This puts to rest speculation that BG wants to quit operations in India. The company recently exited an exploration acreage and is in the process of exiting another. It is also getting out of its profitable downstream business — divesting 65.12 per cent stake in Gujarat Gas Company Ltd.
BG and its partners have already indicated to the Petroleum and Natural Gas Ministry about their intent to seek extension for the PMT fields in the West Coast that account for nearly 6.5 per cent of the country’s domestic oil and gas production.
“The process (for seeking extension) has to start now, as investments beyond 2016 will depend on whether the partners get a nod to work after 2019,” said Shaleen Sharma, President and Managing Director, BG India.
Once the partners are aligned to the terms of extension, the respective companies will seek their board’s approvals, Sharma told Business Line .
The partners would be looking for a longer time frame for extension, he said.
BG, ONGC and RIL are targeting the end of this calendar year to submit a formal application to the Government. Interestingly, the PMT fields were under a PSC which was given before the licensing rounds were introduced in the country. BG acquired stake in the block in 2002.
Another similar contract that will have to go in for extension is Cairn India-operated Ravva fields in the East Coast.
BG has 30 per cent participating interest in Panna-Mukta and mid-and south Tapti fields. The venture consists of ONGC with 40 per cent stake and Reliance Industries Ltd with 30 per cent.
The joint venture field achieved production of 500 million barrels of oil equivalent (mmboe) on June 15. The partners continue to step up recovery through incremental development of the existing fields.
At present, including PMT fields, BG has two other blocks that were won in the New Exploration Licensing Rounds.