The blocks, KG-OS-DW III ("GD"), KG-OS-DW ("KD") and KG-OS-DW ("KD Extn"), are located in the Krishna Godavari Basin, and in the vicinity of several blocks in which there have been recent discoveries. These three blocks cover a total area of 3,090 square kilometers. Subject to agreeing farm-in arrangements and Government approval, BGEPIL and ONGC will each own a 50 percent interest in these blocks.
The deepwater exploration blocks were assigned to ONGC by the Government of India on a nomination basis and on New Exploration Licencing Policy (NELP) terms for exploration and development in partnership with a global major oil and gas company. ONGC had marketed these blocks during NELP-V with the Ministry of Petroleum & Natural Gas.
BGEPIL has agreed to pay a US$5 million up front payment for each block upon receipt of Government approval of the farm-in, and additional consideration will be paid towards exploration costs as well as a payment made upon discovery.
ONGC and BG India have also agreed to explore other mutually beneficial opportunities in India and overseas.
Announcing the agreement at the World Oil & Gas Assembly in Jaipur, Mr Subir Raha, Chairman and Managing Director, Oil and Natural Gas Corporation Ltd, said: "ONGC is happy to welcome BG, after Cairn and Eni, as joint operator in these exploration blocks. We are happy that the joint operatorship framework promoted by ONGC in the Panna, Mukta and Tapti producing fields has generated the confidence for such a partnership in India and abroad."
Frank Chapman, Chief Executive, BG Group plc, said: "This arrangement marks the beginning of BG India's diversification of its upstream portfolio from current interests in producing fields on the west coast of India to a new growing hydrocarbon region on the east coast. The Krishna Godavari Basin looks set to become an important gas province for India and we are committed to playing a part in its development. We also look forward to working in closer partnership with ONGC and strengthening our existing relationship with them."
BGEPIL and ONGC are partners with Reliance Industries in the offshore Panna/Mukta and Tapti joint venture on the west coast of Mumbai.
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