Giving more credence to reports that ONGC is looking at acquiring a majority stake in the Gujarat government-owned GSPC’s 1,850-sq km KG Basin block, KG-OSN-2001/3, petroleum minister Dharmendra Pradhan said on Tuesday: “Yes, they (ONGC and GSPC) are talking to each other. If ONGC and GSPC can do a joint development, the exploration cost would come down.” Pradhan, however, maintained that the outcome of the negotiations between the companies would be a “commercial decision”.

India's flagship explorer Oil and Natural Gas Corporation (ONGC) is facing a repeat of the Krishna Godavari (KG) basin fiasco in Iran, as lengthy negotiations on terms may drive it to a point where its discovered gas reserves in Farzad-B field in the Persian Gulf may be drawn out by neighbouring Saudi Arabia.

State-owned ONGC alleges that 11.12 billion cubic meters of natural gas worth Rs 11,055 crore has flowed from its idling KG basin blocks in Bay of Bengal blocks to neighbouring KG-D6 fields of Reliance Industries.

ONGC Videsh Ltd has taken a bridge loan of USD 1.2 billion from a group of foreign banks at a highly competitive rate of about 1.3 per cent to fund its acquisition of 15 per cent stake in Russia’s second biggest oil field of Vankor.

Banks including Citi, DBS, Mizuho, Standard Chartered and Sumitomo Mitsui Banking Corp have given a nine-month loan to OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), at an interest rate of Libor plus 83 basis points, sources privy to the development said.

The central government-owned ONGC and the Gujarat government-owned GSPC are in advanced talks to negotiate the price at which ONGC will take a 50%+ stake in the latter’s 1,850 square kilometer KG Basin block,KG-OSN-2001/3, which is set to commence commercial production as early as next month. GSPC is the operator for the block and has an 80% share in the consortium.

Neither officials at ONGC nor the GSPC-consortium wished to comment on the contours of the likely sale. Nor did petroleum minister Dharmendra Pradhan.

Mumbai: State-owned energy explorers that surrendered 69 inoperative oilfields to the government in 2014 want to be paid for the initial exploratory work they did before these fields are put up for auction, four persons familiar with the development said.

The 69 so-called marginal fields were discovered and granted to Oil and Natural Gas Corp. (ONGC) and Oil India Ltd but were not developed due to factors such as small reserve size, economic unviability and lack of infrastructure.

Shares of oil companies were trading higher by up to 4% after crude oil prices hit 2016 highs on Tuesday. Oil & Natural Gas Corporation (ONGC) has gained 4% to 222, followed by Oil India (3% at Rs 328), and Cairn India (2% at Rs 148) on BSE.

Crude oil prices hit 2016 highs on Tuesday on the back of a rally in the gasoline market and after an industry group reported a surprise draw in U.S. crude stockpiles, according to a Reuters report.

State-run Oil and Natural Gas Corporation is likely to take a hit of around R3,000 crore on its profit after tax (PAT) in FY17 owing to the 20% reduction in domestic gas price for the April-September 2016 period, reports Siddhartha P Saikia in New Delhi. This is despite the company expecting a rise in its gas output by at least 2 billion cubic metres or 9% in the current fiscal year.

Shares of Deep Industries were up nearly 5% at Rs 156 after the company announced that it has received an order from state-owned oil exploration major ONCG to provide natural gas compression services.

The company in a release said that it has received Notification of Award for Hiring of Natural Gas Compression Services at ONGC, GGS-IV Ankleshwar for a capacity of 80000 SCMD for a period of three years.

A joint venture led by Reliance Industries and BG Group has agreed to hand drilling infrastructure from an abandoned gas field to ONGC, their junior partner, helping the state-run group develop a large gas reserve nearby, two company sources said.

Executives from Reliance, BG and ONGC signed an agreement in New Delhi on Tuesday night — providing respite in a months-long battle between the partners over the cost of closing the Tapti field off India's west coast.

ONGC is facing a tough challenge to produce more oil and gas from its onshore fields, as the government-owned explorer is unlikely to meet its target from on-land fields in 2015-16.

Sources told FE that crude oil output from onshore fields of ONGC are likely to hover at 5.8 million tonne (MT) in FY16, 5% lower than the target for the year. Similarly, gas output from on-land fields are likely to touch 4.7 billion cubic metres (bcm), nearly 12% below the target of 5.36 bcm in the current fiscal year.

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