State-owned Oil and Natural Gas Corp (ONGC) will hire international oil service companies for the first time to raise output from mature oilfields. India’s top oil and gas producer has shortlisted Schlumberger, Halliburton and GE subsidiary Baker Hughes for raising output from Kalol field in Gujarat and Geleki field in Assam, according to tender document floated by the company.
Other oilfield service providers meeting pre-qualification criteria can also bid for the job by May 25, it said.
The service providers will be paid a fee for raising output beyond an agreed baseline production. “To achieve the objective of production enhancement of oil and gas from mature fields, ONGC invites global oil and gas service providers having firm commitment to invest and processing capabilities to bid,” the document said.
“The service provider will be required to invest in capital expenditure and operating expenditure to increase production from the existing ‘baseline’ production.” ONGC is looking to raise domestic output quickly to meet Prime Minister Narendra Modi’s target of cutting import dependence by 10 per cent by 2022. India currently imports over 80 per cent of its oil needs.
Originally, ONGC had on December 7, 2016 signed a Summary of Understanding (SoU) to give Kalol field to Halliburton and Geleki field to Schlumberger for raising production above the current baseline output. Though the contracts were signed in presence of Oil Minister Dharmendra Pradhan, ONGC rescinded them last year on fears of courting controversy for handing fields on nomination basis.
Thereafter, the company in June 2017 floated an expression of interest (EoI) from service providers for undertaking production enhancement. “Following are the names of vendors meeting the pre-qualification criteria (of EoI) : Schlumberger Asia Services, Halliburton Offshore Services Inc and Baker Hughes Singapore PTE Ltd,” the firm said in the document seeking final bids by May 25.
The 15-year Production Enhancement Contract (PEC) will require the oilfield service producer to commit to investing in capital expenditure and operating expenditure to increase production from the existing ‘baseline’ output.
A tariff will be paid in USD per barrel of oil and USD per million British thermal unit for gas for any incremental hydrocarbon produced and saved over the baseline. The baseline shall be prepared by ONGC and vetted and certified by a third party of international repute.
All the oil and gas produced will belong to ONGC and the service provider arrangement is being entered into to get the best technology available, sources said. Besides Schlumberger, Halliburton and Baker Hughes, ONGC was also in talks with Weatherford International. Sources said based on the experience of Kalol and Geleki, the PEC model may be extended to other onshore fields.