ONGC Partners With BP to Boost Mumbai High Production: What You Need to Know

Oil and Natural Gas Corporation Limited (ONGC), India’s leading national oil company, has taken a significant step in boosting production from its mature Mumbai High Field. Located offshore near Mumbai, this prolific multi-layered field has been a cornerstone of India’s domestic crude oil and natural gas production since its discovery in 1974.

With increasing challenges in maintaining production levels, ONGC has onboarded BP Exploration (Alpha) Ltd., a wholly-owned subsidiary of BP Plc, UK, as its Technical Services Provider (TSP). This partnership is poised to harness cutting-edge technology and advanced recovery techniques to address the production hurdles of Mumbai High.

As of 11:51 AM on January 9, 2025, ONGC’s share price is trading down by 2.45%

Key Details of the Partnership

• Why Mumbai High Matters:
  The field, discovered in 1974, contributes significantly to India’s energy needs. It has undergone various enhancement schemes over the decades, but persistent challenges in production have necessitated a fresh approach.
• Selection Process:
  ONGC issued an International Competitive Bidding (ICB) tender, attracting interest from major global players, including BP and Shell. Following a rigorous evaluation, BP Exploration (Alpha) Ltd. was selected for its proven expertise in managing complex reservoirs.

Ambitious Targets for Production Growth

BP’s involvement is expected to yield a remarkable increase in output over the ten-year contract period:

• Crude Oil Production: Projected to rise by ~44%, from 45.47 MMT to 65.41 MMT.
• Natural Gas Output: Expected to grow by ~89%, from 24.94 BCM to 47.22 BCM.
• Overall Hydrocarbons: Combined output (oil and gas) is set to increase by ~60%, reaching 112.63 MMToe.

These improvements are anticipated to commence in FY26, with full-scale impact visible by FY28.

Economic Implications

The enhanced production is expected to generate:

• Revenue: An additional $10.3 billion in oil and gas revenue (net of levies).
• Government Contributions: Up to $5 billion in royalties, cess, and levies.

Innovative Payment Structure

The TSP agreement includes a fixed fee for the initial two years. Post this period, BP will earn a service fee based on a share of the revenue generated from net incremental production after cost recovery.

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