The agreement was signed on July 2, 2007, in New Delhi. Mr. N K Mitra, Director (Offshore) and Mr. D K Pande, Director (Exploration), signed the agreement on behalf of ONGC and Mr. Tore Torvund, Executive Vice President of Norsk Hydro, signed on behalf of the Norwegian producer.
This agreement is the culmination to a run-up of events, especially the 'Protocol of Intent' signed between ONGC and Norsk Hydro in Oslo on September 1, 2005, during the visit of a high-level Ministerial delegation headed by the then Minister of Petroleum & Natural Gas, for cooperation in some deepwater blocks off Cuban Republic and Middle East.
ONGC looks forward to sharing in the technological edge and experience of Norsk Hydro on development and production from deepwater and ultra-deepwater, and thin oil development and production in Vasai East.
The support and cooperation of a strategic partnership with Norsk Hydro will not only help ONGC to build up the technology, knowledge and confidence to produce from deepwater acreage, but will also help ONGC acquire sophisticated technology for completion of deepwater wells. Norsk Hydro's experience in various offshore projects and their capabilities in providing high-tech solutions, will be particularly useful to solve the challenges in Vasai East, for which ONGC will pay Norsk Hydro US $7 million.
Norsk Hydro agrees to acquire a participating interest of 10 percent for the deepwater block KG-DWN-98/2 in Krishna-Godavari, with an investment cap of US $26 million during appraisal phase and with an option to increase it by another 10 percent.
The Norwegian firm may go for participating interest in more NELP blocks once they examine the data in the next six months. ONGC has 32 offshore exploration blocks under NELP, of which 26 are in deepwater and 6 in shallow-water. Of the 26 deepwater blocks, 12 are in ultra-deepwater. ONGC has 100 percent participating interest in 12 blocks and the remainder has other oil companies with various participating interests.
Speaking after signing of this agreement, ONGC CMD Mr. R S Sharma said that he sees this as a major landmark in ONGC's maturity in deepwater oil & gas exploration and production.
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