Oil and Natural Gas Corporation Ltd. (ONGC) and Shell Exploration Company B.V. (Shell) have signed a Memorandum of Understanding (MoU) to examine significant opportunities for future co-operation both in India and other regions across the world.
The signing ceremony was presided over by the Minister of Petroleum and Natural Gas Shri Mani Shankar Aiyar. The MoU itself was signed by ONGC Chairman & Managing Director, Mr. Subir Raha and Mr. Vikram Singh Mehta, Chairman, Shell Companies in India in the presence of Ms. Linda Cook, Executive Director - Gas and Power, Royal Dutch Shell plc.
The MoU covers possible areas of co-operation across the full range of upstream and downstream activities, including exploration and production, coal gasification, natural gas, oil products and refining and petrochemicals.
The agreement is one of the most comprehensive of its type and marks the start of a joint effort by both companies to achieve significant growth of their respective businesses in both India and internationally.
ONGC Chairman & Managing Director Mr. Subir Raha said: "Today our footprint extends beyond India. To succeed swiftly on a global scale, ONGC needs to exploit operational and strategic synergies between ONGC and Shell. This is what the MoU sets out to do. By combining the strengths, knowledge and experiences of both companies, we can create a partnership that will become a competitive and dynamic force in the industry".
Shell Executive Director Ms. Linda Cook said: "India is an important country for Shell and we are keen to explore additional partnership opportunities to help develop its enormous energy potential. Today's signing is an important step towards that goal".
Shell India Chairman, Mr. Vikram Mehta said: "India is a strategically important country for Shell, and ONGC is a company with vast experience. We look forward to working in partnership with ONGC towards the objective of securing new energy supplies for India and beyond.
Shell and ONGC will now set up a joint steering committee to manage co-operation between the two companies and identify those opportunities which will be further developed into binding agreements and full-scale projects.
The areas of potential upstream co-operation specified in the MoU include:
Upstream
• Investigation of increasing and enhancing production from existing producing fields in India.
• Joint bidding in exploration acreage rounds in India, and farming into existing, but undeveloped, India exploration blocks.
• Investigation of opportunities for co-operation and joint participation in international upstream ventures from Shell and ONGC's portfolios.
• Evaluation of a joint project for coal gasification in India.
Downstream
• Investigate long-term oil products supply arrangements, and evaluate supply chain options including joint oil product terminals and depots.
• Investigate setting up a joint venture bitumen business in India, and evaluate joint business opportunities in the area of marine fuels and lubricants.
• Evaluate joint business opportunities in new refinery and petrochemical projects, including co-operation on product exports and potential Shell participation in new green-field refinery and petrochemical plants.
Other areas
• Identify and evaluate joint business opportunities in the area of coal bed methane in India.
• Investigate options that could be used to monetise currently stranded ONGC natural gas resources.
• Evaluate options for co-operation in renewable energy sources, such as wind energy for power generation.
• Provide energy management and consultancy services for selected plants and processes, including potential design and supply of catalysts for both revamping and new manufacturing processes in refining and petrochemicals.
• Co-operation in the area of HSE (Health, Safety, Environment), including enhancing HSE performance in selected assets, investigate and further develop ONGC's safety institute in Goa and potentially upgrade the institute to a centre of HSE expertise in South Asia, and sharing experience in offshore emergency response.