India's ONGC, ConocoPhillips in shale gas deal

India's Oil and Natural Gas Corp. on Friday signed a deal with US-based energy giant ConocoPhillips to jointly explore and develop shale gas reserves and deep-water oil fields.

Under the agreement, the two firms will explore shale resources in India, North America and other regions, Oil and Natural Gas Corp. (ONGC) chairman Sudhir Vasudeva said.

The deal with ConocoPhillips, the world's fifth largest energy firm, would also include exploring deepwater blocks in India's eastern offshore region.

"ConocoPhillips is engaged in the hunt for oil and gas for many years and have developed an expertise in deepwater exploration and exploitation," ONGC director S.V. Rao told reporters in the city.

Indian oil and gas exploration firms are getting into partnerships with overseas firms to gain access to technology and drilling expertise that will help them explore and produce oil and increase output.

Private explorer Reliance, controlled by billionaire Mukesh Ambani, last year signed a $7.2 billion deal with BP, hoping the British giant's deepwater drilling expertise would help boost output from its local KG-D6 field.

Analysts see the deal with ConocoPhillips as part of ONGC's efforts to offset previous years of decline in output.

State-run ONGC accounts for about two-thirds of India's crude oil production but has seen a 6.3 percent decline in oil output to 24.42 million tonnes (488,400 barrels a day) in the past four years to March 2011.

Friday's agreement on shale gas is similar to recent developments in China, where Western energy giants are entering into deals with local firms.

Shale gas -- extracted from fractures in shale or in organic material found in deposits -- is considered an unconventional source of energy but is growing in importance in North America.

Earlier this month, Royal Dutch Shell and China National Petroleum Corp., China's largest energy producer, signed a deal to develop shale gas reserves in Sichuan province.

Reliance in 2010 announced plans for investments in three separate US-based shale gas assets, worth a combined $3.45 billion.

--Dow Jones Newswires contributed to this report--

--

Did you know that you can get stories like this on the Yahoo mail app?
Download it here.
Loading...

Latest News