ONGC inks deal with BP to boost Mumbai High output by 60%
New Delhi: Oil and Natural Gas Corporation Ltd (ONGC) has signed a contract with global oil major BP for raising output from its flagship Mumbai High oil and gas field by up to 60 per cent over the next decade.
BP will be Technical Services Provider (TSP) for the Mumbai High field, India's largest and most prolific offshore oil field, the two firms said in a statement.
"ONGC will retain ownership and operational control of the field," it said.
"Under the terms of the contract, BP will receive a fixed fee for a period of two years for its deployed personnel, followed by a service fee linked to incremental oil and gas production".
BP will work in close collaboration with ONGC to stabilise the field's current production decline and restore it to a robust growth trajectory.
Last month ONGC had said the BP deal will yield USD 10.3 billion revenue boost from increased oil and gas production.
BP Exploration (Alpha) Ltd, a wholly-owned step-down subsidiary of BP Plc, as the technical service provider (TSP) "has indicated a substantial potential increase of approximately 44 per cent in crude oil (from baseline production of 45.47 million tonnes to 65.41 million tonnes) and approximately 89 per cent increase in gas production (from 24.94 billion cubic metres to 47.22 billion cubic metres) for the ten-year contract period," it had said.
In terms of oil and oil equivalent gas, the increase works out to 60 per cent (from 70.40 million tonnes of oil equivalent to 112.63 million tonnes of oil equivalent).
The increase is expected to be visible from FY26 (April 2025 to March 2026 financial year) with full-scale visibility expected from FY28 (April 2027 to March 2028 fiscal).
ONGC said TSP 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 hydrocarbon production, after recovering incremental costs.
Mumbai High (MH), a prolific multi-layered field located in the Mumbai offshore area, was discovered by ONGC in 1974 and started production in 1976.
The field, which lies some 160 kilometres in the Arabian Sea off the Mumbai coast, hit a peak of 4,76,000 barrels of oil per day and 28 billion cubic metres of gas in 1989 and has since seen a gradual decline in output.
The field currently produces around 1,32,265 barrels of oil per day and around 13 billion cubic metres of gas (less than 10 million standard cubic metres per day or mmscmd).
This output was projected to decline to about 75,000 bpd of oil and less than 4.5 mmscmd of gas by 2037-38.
"Leveraging its extensive experience in managing some of the world's largest oil fields, BP will optimize oil recovery at Mumbai High by conducting comprehensive reviews of sub-surface models, implementing system optimizations, and enhancing reservoir management practices.
"This partnership is anticipated to significantly boost domestic oil and gas production, thereby increasing revenue for ONGC and benefiting the people of India, while also yielding higher service fee returns for BP," the statement said.
BP will assemble a team of technical experts to commence work by March 2025. In support of this initiative, both companies have already established a Senior Management Team and a Joint Management Team to ensure seamless project execution.
ONGC chairman and CEO Arun Kumar Singh said, "By engaging a TSP, ONGC aims to realize the enhanced potential of the Mumbai High field by leveraging cutting-edge technologies and global best practices, securing its future contribution to India's energy landscape."
Kartikeya Dube, Head of Country and Chairman BP India said, "We are extremely proud and privileged to be selected as a partner by ONGC and look forward to bringing our international experience and technical expertise to the Mumbai High field."
"This opportunity further underpins our commitment to exploration and the production of oil and gas in India, creating value for both companies and helping support the country's vision for energy independence and security," Dube added.
