ONGC, Shell to cooperate on energy development

ONGC has announced having signed a wide-ranging MoU with Shell Exploration Company BV (subsidiary of Royal Dutch Shell, the world's third largest petroleum group) to examine significant opportunities for future co-operation both in India and other countries.

was present at the signing of the MoU between Subir Raha, chairman and managing director, ONGC, and Vikram Singh Mehta, chairman, Shell Companies in India. Also present on the occasion were petroleum minister Mani Shankar Aiyar, Sir Michael Arthur, high commissioner of the UK and Linda Cook, executive director, gas and power, Royal Dutch Shell Plc, and other senior executives.

The MoU covers wide areas of co-operation across the full range of upstream and downstream activities, including exploration and production, coal gasification, natural gas, oil products, refining and petrochemicals.

The agreement is one of the most comprehensive of its type and marks the beginning of a joint effort by both companies to achieve significant growth of their respective businesses both in India and abroad.

Raha acknowledged the proactive collaboration with Shell in diverse areas and acknowledged Shell's unstinted support to ONGC in the aftermath of the BHN accident in July 2005. He added that the collaboration would certainly create value and satisfaction for the stakeholders.

The two companies will set up a steering committee to manage co-operation between the two companies.

Areas of potential co-operation under the MoU:
Upstream:
- 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
Downstream:
- Investigate Long-term oil products supply arrangements, and evaluate supply chain options including joint oil product terminals and depots.
- Investigate setting up a joint venture bitumen business in India, and evaluate joint business opportunities in the area of marine fuels and lubricants.
- Evaluate 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.
Gas, CBM and renewables:
- Identify and evaluate joint business opportunities in the area of coal bed methane applications in India.
- Investigate options that could be used to monetise the ONGC's currently stranded natural gas resources.
- Evaluation of a joint project for coal gasification facilities in India.
- Evaluate options for co-operation in renewable energy sources, such as wind energy for power generation
- Provide energy management and consultancy services for selected plants and processes, including potential design and supply of catalysts for both revamping and new manufacturing processes in refining and petrochemicals.
- Co-operation in the area of HSE (health, safety, environment) needs including enhancing HSE performance in selected assets, investigate and further develop ONGC's safety institute in Goa and potentially upgrade the institute to a centre of HSE expertise in South Asia, and sharing experience in offshore emergency response.