Global energy giant Exxon Mobil Corp. will offer its expertise and technology to India’s biggest state-owned explorer Oil and Natural Gas Corp. Ltd. (ONGC) to help develop its resources in offshore blocks, according to two sources directly privy to the development.
The memorandum of understanding (MoU), signed late Oct. 14, will be later signed as a definitive deal after Exxon Mobil studies the blocks of the company, one of the sources told Reuters.
Lately, India is generating a lot of interest worldwide in its oil and gas operations, as growing demand amid a global slowdown and government policies have made investments and returns attractive.
“Witnessed the exchange of a MoU between ONGC and Exxon Mobil to identify areas for exploration in deep water in east and west coast of India,” Oil Minister Dharmendra Pradhan said in a tweet.
ONGC and Exxon Mobil will also jointly identify areas to submit bids for more exploration assets in India, he added.
ONGC is currently developing deep water oil and gas blocks in India’s east coast, which are expected to come onstream by 2020 and produce 15 million standard cubic meters per day (MMscm/d) of gas at its peak.
On Oct. 14, Exxon Mobil signed another memorandum with India’s biggest refiner Indian Oil Corp. Ltd. to explore ways to supply LNG to meet India’s burgeoning gas demand.
French energy major Total SA also announced that it would buy around 35% stake in India’s Adani Gas Ltd.
“It is a non-binding agreement. It is a technical tie up. The MoU provides a framework to enable future tie ups between the two companies,” one of the sources said.
The discovery located in state waters offshore Alaska could hold as much as 10 billion barrels of oil in place.
Hedging has been a security blanket for some. Having assets that can deliver high returns at $40 oil prices gives EOG an edge.
The company says the Mowry and Niobrara shale plays have increased its estimated resource potential in the basin to more than 2 billion barrels of oil equivalent.