Oil and Natural Gas Corporation (ONGC), BP and Reliance Industries Limited (RIL) are exploring a proposal to develop a common offshore infrastructure facility worth approximately $1 billion in the Mahanadi basin. The proposed facility aims to support the production and evacuation of natural gas and condensate from deepwater and ultra-deepwater fields. Initiated by the Ministry of Petroleum and Natural Gas, the proposal remains at a preliminary stage. According to an Economic Times report, citing two industry executives familiar with the discussions, the stakeholders are expected to appoint technical consultants shortly to assess the project’s feasibility.
Shared Offshore Infrastructure to Reduce Development Costs
The proposed infrastructure-sharing arrangement aims to reduce capital expenditure, improve operational efficiency and make smaller and marginal hydrocarbon discoveries commercially viable. Currently, deepwater and ultra-deepwater exploration projects require substantial investments in offshore production, processing and transportation facilities. Consequently, the high upfront costs often make smaller discoveries economically unattractive, even when recoverable hydrocarbon reserves are available. By developing a common offshore facility, ONGC, BP and Reliance could avoid duplicating expensive infrastructure and reduce the financial burden on individual operators.
Accelerating Commercial Development of Offshore Discoveries
The proposed facility would enable multiple operators to pool production and share critical offshore infrastructure. This approach could accelerate the commercial development of hydrocarbon discoveries that might otherwise remain undeveloped due to high infrastructure costs. The facility would primarily handle natural gas and condensate produced from offshore fields in the Mahanadi basin. As reported by psuwatch.com, if implemented, the project could provide a more cost-effective development model for deepwater and ultra-deepwater resources while supporting India’s efforts to strengthen domestic natural gas production and improve offshore energy infrastructure.
