NEW DELHI, Jan 9: The state-owned Oil and Natural Gas Corporation (ONGC) anticipates a significant revenue increase of USD 10.3 billion due to enhanced oil and gas production facilitated by a partnership with BP in the Mumbai High field.
In its announcement, ONGC revealed it has engaged BP Exploration (Alpha) Ltd, a fully-owned subsidiary of BP Plc, as the technical service provider (TSP) to boost production from the Mumbai High oil and gas field situated in the Arabian Sea.
The TSP is projected to enhance crude oil production by approximately 44%, increasing from a baseline of 45.47 million tonnes to 65.41 million tonnes, and nearly 89% in gas production, escalating from 24.94 billion cubic metres to 47.22 billion cubic metres over the ten-year contract period.
In combined oil and gas terms, this translates to a 60% increase, rising from 70.40 million tonnes of oil equivalent to 112.63 million tonnes.
ONGC expects to see the effects of this increase starting in FY26 (from April 2025 to March 2026), with full visibility anticipated by FY28 (April 2027 to March 2028). This additional production is projected to yield extra oil and gas revenues of up to USD 10.30 billion, along with an estimated USD 5 billion contribution to government revenue through royalties and other levies.
In June of the previous year, ONGC issued a tender looking for foreign partners to address the declining output from its flagship Mumbai High fields, proposing a share of revenue from additional production alongside a fixed fee, excluding any equity stake.
Both BP and Royal Dutch Shell submitted an Expression of Interest (EoI) at the conclusion of the tender period in September. However, Shell did not present a final bid detailing additional production and desired revenue share, making BP the sole bidder.
“Following the bid assessment, BP Exploration (Alpha) Ltd has been chosen as TSP. The TSP will evaluate field performance and identify enhancements in reservoirs, facilities, and wells to boost production from the Mumbai High field,” the statement added.
ONGC mentioned that the TSP will receive a fixed fee during the initial two years, transitioning to a service fee calculated as a percentage of revenue from net incremental hydrocarbon production after recovering additional costs.
“By partnering with a TSP, ONGC aspires to unlock the Mumbai High field’s potential using advanced technologies and global best practices, thereby securing its role in India’s energy future,” it stated.
As the national oil company (NOC), ONGC is critical in addressing India’s increasing energy needs driven by rapid economic expansion, contributing around 75% of the country’s domestic crude oil and natural gas output.
The Mumbai High field, a rich multi-layered reserve located off the Mumbai coast, was discovered by ONGC in 1974 and commenced production in 1976. At its peak in 1989, it produced 476,000 barrels of oil per day and 28 billion cubic metres of gas but has since experienced a gradual decrease in output.
Currently, the Mumbai High field yields about 132,265 barrels of oil per day and approximately 13 billion cubic metres of gas (below 10 million standard cubic metres per day). Projections suggest this output could decline to around 75,000 bpd of oil and less than 4.5 mmscmd of gas by 2037-38.
“While ONGC aims to tap into new hydrocarbon resources through greenfield initiatives, enhancing recovery from mature fields like Mumbai High remains a priority for boosting domestic production,” the statement remarked.
Over the years, ONGC has deployed various enhancement strategies in the Mumbai High field to elevate production and recovery rates. Techniques employed include gas and water shut-offs, side-tracking low-performing producers, enhanced water injection, gas-lift systems, and infill drilling. Despite these efforts, production challenges persist, requiring advanced interventions.
“To address these challenges and maximize the potential of the Mumbai High field, ONGC has issued an international competitive bidding (ICB) tender aimed at appointing a technical services provider with proven expertise in managing complex mature reservoirs and applying advanced recovery technologies and best practices,” the statement concluded.
“Through this ICB tender, ONGC sought participation from international operators with established technical capabilities, financial capacity, and a successful track record in similar ventures. Major international oil companies were invited to participate, with BP and Shell expressing interest and BP ultimately submitting the final bid,” the statement added. (PTI)
