Amidst reports about strains in their partnership, public sector giant ONGC has said that it has no problems working with the Vedanta owned company, Cairn India.

ONGC’s Director-Exploration N.K. Verma told Business Line that ONGC and Cairn have “co-operated effectively”. The two companies are partners in RJ-ON-90/1, a block in Rajasthan. Cairn India has a 70 per cent interest in the block, while the rest is held by the public sector oil major.

In the recent past, there have been reports about strains in the relationship between the two companies over various issues. Last month, the India-focused online newsletter Petrowatch reported that ONGC was sore that Cairn India’s Chief Executive Officer P. Elango was putting pressure on ONGC through Petroleum Minister M. Veerappa Moily.

It said that at Elango’s behest, Moily told ONGC Chairman and Managing Director Sudhir Vasudeva to speed up approval of Cairn India’s proposal to invest $700 million in ‘enhanced oil recovery’ (EOR) projects in Rajasthan, even as ONGC was seeking information on the costs.

More recently, the two companies have sparred over hiring rigs; ONGC felt that Cairn India had acted without consulting it.

Asked about this, Verma downplayed the matter, observing that “we don’t have problems as such, but we have to take care of our commercial interests” and stressed that there was “no enmity”.

Asked about Cairn approaching the Minister, Verma said he would not like to comment but noted, in general, that “all companies try to do their best in their interests”. Making light of it, he said that both partners enjoyed “certain privileges” with the Ministry.

“Their timelines and horizons are different, ours are also different. We sometimes work even in sub-economic conditions in the national interest,” said Verma.

Asked about ONGC supposedly delaying approval for EOR projects, he said, “It is their (Cairn’s) perception. We work in the national interest. If something is not effective for the long-term benefit of the reservoir, we will hold it.”

Shale gas

On the prospects of shale gas in India, Verma cautioned against over-hyping the issue. ONGC wants to tap shale oil and gas, an unconventional source of energy, but Verma is circumspect about its prospects. To start with, he said the potential is “moderate” — 80-90 trillion cubic feet of gas. (Quoting a United States Geological Survey, ONGC’s recent corporate presentation mentions this figure as 65 trillion cubic feet.)

Comparatively, the potential of coal bed methane is estimated at 450 trillion cubic feet (tcf) and that of underground coal gasification (conversion of coal into gas in the coal seams) at 6,900 tcf.

The estimate of 80 tcf of shale gas is based on the meagre data available right now, said Verma. However, even if future data show more shale gas, India will face challenges extracting it.

When Sri Lanka backtracked

ONGC’s Director-Exploration N. K. Verma cited an instance of Sri Lanka going back on its word to the public sector giant.

The island-nation had apparently promised ONGC that it (the company) would be given two oil blocks in the Gulf of Mannar, adjacent to the block in which Cairn had discovered gas on. On this basis, ONGC began negotiations with Cairn, hoping to form a joint venture covering all the three blocks, with perhaps 50 per cent interest each.

However, Sri Lanka “backed out” and has since put the two blocks along with some others for global bidding.

>ramesh.m@thehindu.co.in