Oil and Natural Gas Corporation Ltd. (ONGC) and Reliance Industries Ltd. have agreed to pool resources, including supply vessels used in the discovery and production of oil and gas, in an effort to increase offshore energy exploration and operational efficiency.
ONGC and Reliance Sign MOU for Offshore Resource Sharing
On the fringes of India Energy Week (IEW), the two companies signed an MOU for resource-sharing cooperation, according to ONGC Director (Production) Pankaj Kumar.
According to him, the agreement intends to improve operational efficiency, facilitate the quicker completion of offshore projects, and strengthen synergies between the largest oil and gas producer in India and the biggest and most valuable company in the country, which have nearby fields and operations, especially off the east coast.
Collaborative Use of Offshore Resources
In order to minimize effort duplication, maximize capital deployment, and facilitate the timely development of offshore assets—which are essential to supplying India’s expanding energy needs—it looks for ways to collaboratively use resources, infrastructure, and technical capabilities across offshore energy activities.
This is ONGC and Reliance’s second recent partnership.
In 2024, ONGC, Reliance, and BP enter the Open Acreage Licensing Policy (OALP) bid round IX for Block GS-OSHP-2022/2, a 5,454-sq-km offshore tract in the Saurashtra Basin. The partners will work together to evaluate the block’s hydrocarbon possibilities because it is a Category-II basin with substantial exploratory potential.
Government Approvals and Offshore Supply Vessels
The pact, according to industry analysts, is part of a larger effort by New Delhi to draw in investment, share risks, and improve energy security through cooperative exploration, especially as offshore resources become more essential to domestic supplies.
For their nearby oil and gas fields, ONGC and Reliance employ resources such as offshore supply vessels (OSV). Currently, when a company leases an OSV flying a foreign flag, it must obtain approval from many authorities, such as the director general of shipping and the ministries of defense and home affairs.
These approvals are unique to operation in a given area and for a given period of time, and they require 45 days. After the first firm dehires the OSV, the second company must reapply for all of these permits in order to use it.
⚓ ONGC–Reliance Offshore Resource Sharing
- Objective: Pool offshore supply vessels (OSVs) and technical resources
- Focus Area: East Coast & Krishna Godavari Basin
- Benefits: Faster project completion, reduced approvals, minimized duplication
- Companies: ONGC, Reliance, and nearby BP operations
- Strategy: Move OSVs across adjacent blocks efficiently
Resource Sharing Benefits
According to Kumar, sharing resources makes more sense because the two firms’ oil and gas operations complement each other. “The idea is that if the OSV and its crew have got approvals from all authorities, it should be able to move from one area to another depending on requirement,” he stated. The OSV should be able to move from one block or area to another without having to go through the time-consuming process of de-hiring and approvals.
As an illustration, he stated that an OSV that ONGC uses on its KG-DWN-98/2 block in the Krishna Godavari basin may relocate to Reliance-BP’s nearby KG-DWN-98/3 block or vice versa after completing work for the business.
Government Approvals Streamlined
Following the Memorandum of Understanding, the two businesses will petition the government to permit the usage of any vessel in the Indian sedimentary basin that has obtained the required permits.
The partnership represents a change toward cooperative approaches that strike a compromise between efficiency and long-term strategic goals, and it represents a significant turning point in India’s offshore energy adventure. Industry experts view this collaboration as a workable strategy for boosting domestic energy output and enhancing resilience against disruptions in global supplies.
🌊 Key Offshore Collaboration Details
- Shared Assets: Offshore supply vessels (OSVs), technical teams, and infrastructure
- Efficiency: Reduces project delays, avoids repeated approvals
- Strategic Advantage: Strengthens India’s domestic energy production
- Scope: East Coast, Saurashtra Basin, Krishna Godavari Basin
- Future: Supports government’s energy security & investment goals
Frequently Asked Questions
1. What contract has Reliance and ONGC signed?
A Memorandum of Understanding (MoU) has been signed by ONGC and Reliance Industries to share offshore resources, including offshore supply vessels (OSVs) used in the production and exploration of oil and gas.
2. What makes this agreement to share resources crucial?
Particularly in cases where both businesses operate in nearby offshore blocks, the agreement seeks to increase operational effectiveness, decrease resource duplication, minimize costs, and expedite the execution of offshore projects.
3. How will offshore operations profit from this?
Currently, using foreign-flagged vessels requires separate government licenses from each company, which can take up to 45 days. Sharing authorized vessels will facilitate the more efficient transfer of resources between adjacent blocks and save time.
4. Which offshore regions stand to gain the most from this partnership?
For offshore areas on India’s east coast, such the Krishna Godavari (KG) Basin, where ONGC and Reliance-BP have contiguous exploration and production licenses, the partnership is especially advantageous.
5. Is this ONGC and Reliance’s first joint venture?
No. This is their second significant partnership. Under the Open Acreage Licensing Policy (OALP) Round IX in 2024, ONGC, Reliance, and BP submitted a combined bid for an offshore block in the Saurashtra Basin.
Conclusion
An important step toward more effective and collaborative offshore energy production in India is the ONGC-Reliance resource-sharing agreement. The collaboration minimizes operational delays, maximizes capital deployment, and promotes quicker development of offshore assets by permitting shared use of vessels and infrastructure.
According to industry analysts, this action is in line with the government’s larger initiative to improve energy security, draw in investment, and lessen reliance on international energy markets. Such partnerships could be crucial to guaranteeing India’s long-term energy resilience as offshore resources become more and more important.
Disclaimer: This article is for informational purposes only and does not constitute investment, financial, or professional advice. Readers should verify facts and consult relevant experts before making decisions.
