Shell and ONGC Join Hands

Shell Exploration Company BV, a part of the world's 3rd largest petroleum group Royal Dutch Shell, has reached an understanding with ONGC to pursue joint business opportunities, globally.

A Memorandum of Understanding (MoU), termed a 'comprehensive' one, was signed between the two Fortune-500 majors in New Delhi on January 19, 2006, to formalize the broad terms of this cooperation.

The Shell Group, currently operating in more than 145 countries, has major interests in India in Natural Gas (in the form of Liquefied Natural Gas - LNG), lubricants, LPG (Liquefied Petroleum Gas), automobile fuel retailing, and Solar Energy. It has, so far, made the highest Foreign Direct Investment (FDI) in India among global integrated energy majors.

Speaking to the media after the signing ceremony, Chairman of the ONGC Group of Companies Mr. Subir Raha said that both parties would investigate various options where there are potential of adding value to their respective businesses based on their complementary skills and project opportunities. "Depending on the viability of the individual options, they would be implemented".

The areas of likely co-operation extend across the entire hydrocarbon value chain, from Exploration & Production, Coal Gasification to Refining and Petrochemicals, as well as Renewable Energy sources.

A cheerful Minister of Petroleum & Natural Gas and Panchayati Raj Mr. Mani Shankar Aiyar said, "The MoU precisely covers the areas of my deepest concerns". Opining that only limited efforts have been made in the last fifty years to access the vast prognosticated reserves of the country, the Minister was optimistic that the partnership between ONGC and Shell would be an important contributor "to expand and accelerate the process of accessing the potential hydrocarbon resources of the country".

The Secretary (Petroleum & Natural Gas) Mr. M S Srinivasan, expressing happiness over the MoU, said, "A new era in Indian petroleum industry has started taking shape in the past few years, with the home-grown multinational ONGC coming out of its 'shell' and forging global partnerships, which is very good sign for the domestic economy".

The British High Commissioner His Excellency Sir Michael Arthur, congratulating all concerned, said the MoU addresses shared mutual concerns as Britain - also a net energy importer is getting increasingly concerned with energy security.

The Chairman of the Shell Companies in India Mr. Vikram Singh Mehta said that in the context of long-term energy security, one has to consider options beyond conventional oil and gas resources, and options relating to renewables and coal gasification need to be considered in a big way.

The MoU features wide-ranging areas of cooperation Upstream, Downstream as well as Renewables, where Shell is investing in a big way in the last few years.

In Upstream, the MoU envisages a Risk-Reward approach optimization of ONGC's producing fields and integrated field development. The approach would be formalized by March 31, 2006, Mr. Raha shared.

The areas of cooperation in Upstream include:

  • Investigation of increasing and enhancing production from existing producing fields in India
  • Joint bidding in exploration acreage rounds in India, and farming into existing, but undeveloped, Indian exploration blocks
  • Investigation of opportunities for co-operation and joint participation in international upstream ventures from Shell and ONGC's portfolios
  • Evaluation of a joint project for coal gasification facilities in India.

The areas of cooperation in Downstream include:

  • Investigation of long-term oil products supply arrangements, and evaluation of supply chain options including joint oil product terminals and depots
  • Investigation of setting up a joint venture bitumen business in India, and evaluation of joint business opportunities in the area of marine fuels and lubricants
  • Evaluation of joint business opportunities in new refinery and petrochemical projects, including co-operation on product exports and potential Shell participation in new green-field refinery and petrochemical plants

In the area of Gas, CBM and Renewable, the MoU envisages cooperation in:

  • Identifying and evaluating joint business opportunities in the area of coal bed methane applications in India
  • >
  • Investigating options that could be used to monetize currently stranded ONGC natural gas resources
  • Evaluation of a joint project for coal gasification facilities in India
  • Evaluating options for co-operation in renewable energy sources, such as wind energy for power generation

The MoU also has provisions relating to pure Technology Services & Consultancy in the following areas:

  • Inspection and Maintenance
  • Health, Safety and Environment Management (HSE) performance
  • Energy efficiency and Loss Control

Replying to a query from the media, Mr. Subir Raha informed that a detailed study is going to be undertaken to create capacity for a high-tech bitumen refinery here, as "going by the indications, there is a good case for such a refinery".


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Chicago, IL
Executive Assistant
Expertise: Executive|Secretarial or Administrative
Location: United States
Regional Manager - Saybolt
Expertise: Executive|Operations Management
Location: Linden, NJ
search for more jobs

Brent Crude Oil : $51.38/BBL 2.44%
Light Crude Oil : $50.43/BBL 2.26%
Natural Gas : $3.14/MMBtu 0.94%
Updated in last 24 hours