Finance
BP projects 44% jump in oil output from India's largest field, ONGC says
Published by Global Banking and Finance Review
Posted on January 24, 2025
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Published by Global Banking and Finance Review
Posted on January 24, 2025
By Sethuraman N R
(Reuters) - Global energy major BP has pledged to lift oil production by 44% and gas output by 89% from India's largest field off its west coast, under a decade-long contract, according to block operator Oil and Natural Gas Corp on Thursday.
ONGC named BP as its technical service provider on Wednesday to assist in boosting output from a baseline crude production of 45.47 million metric tons and 70.40 billion cubic metres (BCM) of gas.
Energy major Shell also participated in the tender, which sought advanced recovery technologies and expertise in managing complex mature reservoirs to boost production, ONGC said in an exchange filing.
BP projected an increase in oil production by 44% to 65.41 million tons and gas output by 89% to 112.63 BCM from the Mumbai High field, which was discovered in 1974.
India, the world's third-biggest oil importer and consumer, aims to rapidly increase its oil and gas production, which has remained stagnant for years.
The increase in production is expected to begin in the next fiscal year starting April 1, with full-scale visibility anticipated by 2027-28, ONGC said in the filing.
The incremental production is expected to generate additional oil and gas revenue for the country of up to $10.30 billion, and contributions from royalty, cess and other levies amounting to as much as $5 billion, the explorer said.
In return, BP will receive a fixed fee for the first two years, followed by a service fee based on a percentage share of the revenue from net incremental production, after recovering incremental costs, according to ONGC.
The field reached peak production of 471,000 barrels per day of oil in March 1985, and its output had declined to about 134,000 bpd in April 2024, a tender document showed last year.
(Reporting by Sethuraman NR; Editing by Nidhi Verma and Sherry Jacob-Phillips)