ONGC Looking for Deepwater Partners

AHMEDABAD, Jan 12, 2007 (Dow Jones Commodities News via Comtex)

India's Oil and Natural Gas Corp. (500312.BY) expects its October-to-December net crude oil price realization to range from $42 to $45 a barrel, its Chairman R.S.Sharma said Friday.

"Our billing in the third quarter will be $61 a barrel and the net realization will be $42-$45 a barrel," Sharma told Dow Jones Newswires on the sidelines of an investor summit in the western state of Gujarat.

The company's billing in the July-to-September quarter was $72 a barrel, while its net realization was "a little over" $45 a barrel, Sharma said.

Net price realization refers to the value of ONGC's crude oil sold to state-run refining companies after discounts.

Sharma said ONGC expects to invest INR180 billion as capital expenditure in the fiscal year starting April.

ONGC will invest about INR50 billion in exploration and INR70 billion-INR80 billion in redevelopment schemes, he said.

"In the current fiscal year, we expect our capital expenditure to touch around INR140 billion," Sharma said.

ONGC, India's largest oil and gas producer by volume, expects to announce a major gas discovery in the Mahanadi offshore field in eastern India by the end of this month, he said.

"We want to combine the announcement with the Krishna-Godavari ultra deep (gas find). We hope to reach the target depth in two weeks," said Sharma.

Sharma said India's upstream oil and gas regulator, the Directorate General of Hydrocarbons, is assessing the find.

The Krishna-Godavari basin, the site of the country's largest gas find in recent years, is also located off India's eastern coast.

"At this stage, we cannot give details about the gas find," said Sharma.

Separately, ONGC is looking for partners to explore its deepwater blocks off India's eastern coast, he said.

ONGC needs partners that can bring in expertise in deepwater exploration.

"We are in talks with Norsk Hydro, ENI and Petrobras...Petronas has shown interest. Their (Petronas') CEO is coming in early February and we hope to take a decision soon," he said.

Sharma declined to state how much equity ONGC is willing to offer to prospective partners.

ONGC is also willing to share its rigs with other exploration and production companies, he said.

"Today, we are ourselves short of rigs. But we are getting more rigs. We recognize that companies need to share their rigs. Considering the costs involved, it is beneficial to have a sharing arrangement," he said.

Sharma said any sharing will be done purely on a commercial basis.

Copyright (c) 2007 Dow Jones & Company, Inc.

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