Shell likely to make investments in the project

The State-owned upstream major Oil & Natural Gas Corporation (ONGC) is in talks with Royal Dutch Shell for enhancement of production from its Kalol field in the Western onshore. Kalol is the highest producing field of ONGC's Ahmedabad Asset in Western onshore and to further enhance its domestic production of oil and gas, the company requires better technology, an expertise which is available with Shell, sources told Business Line.

Average crude production of Kalol field is 1,430 tonnes per day (tpd). The field also produces gas. The field comprises several producing blocks. According to sources, the talks between the two companies are at a nascent stage, as modalities are yet to be firmed up on how Shell would participate in the project. The talks with Shell comes in the backdrop of a memorandum of understanding (MoU) inked between ONGC and Shell Exploration Company BV (subsidiary of Royal Dutch Shell) this January for wide ranging co-operation in the hydrocarbons value chain.

To take forward this association, Kalol field was identified as Shell has given some proposals for further development of the field. Indications are that Shell wants to make some investments in the project, and not just come in as a service contractor.

"How this will be worked out, the concept is being discussed," a company executive said. ONGC is currently implementing an improved oil recovery (IOR) scheme to augment production in this field, as a part of its IOR/enhanced oil recovery EOR scheme for the company's 15 producing fields.

The total crude production (along with condensate) for all the fields in Ahmedabad Asset together is around 1.7 million metric tonnes per year.

ONGC and Shell Exploration Company BV had joined forces for cooperation in oil and gas exploration, refining and renewable sources of energy. Mr Vikram Singh Mehta, Chairman, Shell Companies in India, had then said, "Shell is not present in upstream in India. This MoU will fulfil the gap. The MoU would network Shell's immense knowledge base with ONGC'S technical know-how." Shell and ONGC have set up a steering committee to manage co-operation between the two companies.