Oil and Natural Gas Corporation and Shell Energy India Private Ltd have signed a non-binding Memorandum of Understanding to explore joint opportunities in deepwater oil and gas exploration and liquefied natural gas sourcing, marking a fresh step in international collaboration within India's upstream energy sector. What does the ONGC-Shell agreement cover? The agreement, signed on August 10, covers potential collaboration across India's energy sector, including joint participation in deepwater and ultra-deepwater offshore blocks offered under the government's Open Acreage Licensing Policy, as well as future bidding rounds. ONGC and Shell Energy India will explore opportunities in OALP Rounds X and XI under the broader Samudra Manthan initiative, alongside potential farm-in and farm-out arrangements involving ONGC's existing OALP blocks. The MoU does not commit either company to specific investments or projects but establishes a framework for evaluating cooperation. How does this fit into ONGC's broader push to bring in global expertise? The agreement builds on ONGC's recent efforts to bring international expertise into India's deepwater exploration programme. In August 2022, ONGC signed a Heads of Agreement with ExxonMobil to collaborate on deepwater exploration along India's eastern and western coasts, and the company has since signed similar memorandums with global majors including ExxonMobil and Chevron for deep and ultra-deepwater exploration. What are the two key areas of collaboration between ONGC and Shell? The partnership will focus on two areas of mutual interest. On the upstream side, the companies will explore joint participation in deepwater and ultra-deepwater offshore blocks under OALP Rounds X and XI, alongside farm-in and farm-out opportunities in ONGC's existing acreage. On LNG, the companies will explore sourcing opportunities to support India's transition toward a stronger gas-based economy. Why does this collaboration matter for India's energy strategy? The upstream component comes as India seeks to accelerate exploration of its offshore resources and attract investment and technical expertise into more challenging deepwater and ultra-deepwater acreage. The LNG component could become significant as India looks to increase gas consumption while meeting rising energy demand and diversifying its fuel supply, with ONGC saying the collaboration aims to create synergies across the energy value chain to support deeper exploration, greater energy availability and long-term energy security. What does this signal for India's broader energy sector? The agreement forms part of a wider push by Indian energy companies to secure additional domestic oil and gas resources while expanding access to LNG, as the country works to build a more gas-based economy and strengthen its position in offshore exploration through partnerships with global energy majors.
