ONGC, a state-owned company in India, signed an MOU to benefit from the expertise of Exxon Mobil Corporation (NYSE:XOM) to explore and develop the resources in its offshore blocks. Exxon Mobil will sign the definitive deal after studying the blocks of ONGC.
Government policies, the global slowdown, and the growing demand for oil and gas generate interests for global players in India. Dharmendra Pradhan, oil minister in India, said he is a witness to an exchange of MOU between Exxon Mobil and ONGC to find out deepwater locations that are rich in oil and gas in west and east coast of India.
Exxon Mobil and ONGC to jointly bid
Both Exxon Mobil and ONGC agree to jointly bid after identifying the assets rich in oil and gas in India.
ONGC expects to produce 15 mscmd of gas in 2020 from the deepwater gas and oil blocks, which are being developed on the east coast of India. Exxon Mobil is also eyeing supply contracts of LNG with Indian Oil Corporation to meet the growing demand for liquefied natural gas in India.
Total SA, a French company, announced plans to acquire a stake of 35% in Adani Gas Ltd, an India based company. Both the firms signed a non-binding technical tie-up.
ONGC acquires 51.11% stake in HPCL
ONGC has acquired the entire stake of 51.11% in HPCL in 2018. After purchasing a significant stake in HPCL, ONGC could appoint only one director to the board. However, it has no say in the operations of HPCL. Mukesh K Surana is continuing under the title – Managing Director and Chairman, ignoring the corporate governance structure. According to the mandate, only one chairman is permitted in the group. Either Chief Executive Officers or Managing Directors should head the subsidiaries.
In a chat with reporters, Pradhan said ONGC is free to take its decision to divest the stake in HPCL. When ONGC acquired HPCL in January 2018, it hoped to become a vertically integrated gas and oil firm. Even after one and a half years of the takeover, ONGC has not seen a noticeable change. The company is left with no cash after the acquisition.