ONGC to Sell Stake to Inpex in KG Basin Block

Oil and Natural Gas Corporation (ONGC) is planning to farm out nearly 26 per cent stake in its KG-DWN-2004/6 block in the Krishna-Godavari basin to Japan’s Inpex Corporation.

“Inpex is an experienced global player. ONGC will stand to gain from their experience and technology,” Business Standard quoted an ONGC executive as saying. The company is looking at selling stakes in other blocks as well, the newspaper added.

The report said that Inpex will bear the well commitment cost as an entry fee to this whole business. The two parties will also partner for a technology tie-up.

Being an exploration block, the deal has been structured in such a way that Inpex will pay ONGC what it has spent on the block in the past proportionately and also meet future expenses according to its share. “The past cost is to be paid anyway. They will fund what we do in future in proportion to their share,” the executive added.

The deep-water block is located in the Krishna-Godavari basin and was awarded to ONGC and four partners during the sixth edition of the New Exploration and Licensing Policy (Nelp-VI). The production-sharing contract for the block was signed on March 2, 2007.