On Wednesday, the bid to boost production from Oil and Natural Gas Corporation’s (ONGC) flagship Mumbai High field was won by UK-based global energy major BP. The field has been witnessing a steady decline in output.
Part of the 116,000 sq km Mumbai Offshore Basin in the Arabian Sea, Mumbai High, India’s largest oilfield, has been operational since 1976.It was announced by ONGC that BP Exploration (Alpha) Ltd, a wholly-owned step-down subsidiary of BP Plc, has been chosen as a Technical Services Provider (TSP) to enhance recovery from the mature oilfield.
According to ONGC, the TSP has indicated that oil and oil-equivalent gas production could increase by up to 60 per cent from the baseline production levels, over a 10-year contract period, as assessed through reputed third-party vetted production estimates, factoring in natural decline.A tender was floated by ONGC in June last year, seeking foreign partners to reverse declining output at Mumbai High fields. The tender offered a share of revenue from incremental production plus a fixed fee, without any equity stake. The move faced criticism of privatisation from some ONGC officers and opposition parties, who raised concerns in Parliament over the handing over of control of the oilfield. However, petroleum ministry officials refuted these claims, stating that no equity stake was being given to a foreign partner, and the objective was simply to reverse declining output.


The TSP will review field performance, identify improvements in the reservoir, facilities, and wells, and work towards enhancing production from the Mumbai High field, according to ONGC.The ICB tender invited bids from international operators with proven technical expertise, financial strength, a track record in similar projects, and annual revenues of at least $75 billion.
BP, the sixth-largest global supermajor in oil, already has an active presence in India’s oil and gas exploration and production sector. As part of a partnership with Reliance Industries Limited (RIL), BP also operates 1,900 fuel retail stations across India and produces oil and gas from a deepwater block in the Krishna-Godavari basin.
William Lin, EVP of Gas and Low Carbon Energy at BP, stated, “Our long experience of optimising performance and recovery from major mature fields around the world will be brought to enhance production from Mumbai High, India’s largest oil and gas field, which accounts for 25 per cent of India’s oil production. We look forward to working with ONGC to create value for both the country and the companies involved, while supporting India’s increasing energy needs.”
Foreign exploration and production majors have faced challenges in India due to regulatory hurdles, lack of viable reserves, and the country’s evolving energy policies. BP had acquired a 30 per cent stake in 21 oil and gas blocks from Reliance Industries for $7.2 billion in 2011. However, only a few blocks were found to be commercially viable, resulting in BP relinquishing several blocks by 2016.
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