After operating Panna-Mukta oil and gas fields for 25 years, Royal Dutch Shell and Reliance Industries will revert the western offshore fields back to state-owned Oil and Natural Gas Corp (ONGC), the companies said in a statement.
Panna-Mukta and Tapti (PMT) oil and gas fields in the Arabian Sea off the Mumbai coast were in 1994 awarded a consortium of US energy giant Enron and Reliance. ONGC, which had originally discovered the fields, as a government nominee given 40 per cent back-in rights.
Enron during its bankruptcy was taken over by BG Group of UK in 2003. BG Group's interest was subsequently taken over by Shell in 2016.
The 25-year production sharing contracts for the PMT fields expires this week and Reliance and Shell had decided not to seek an extension for Panna-Mukta fields.
"After 25 years of operating the Panna-Mukta oil and gas fields, the Panna-Mukta and Tapti Joint Venture partners will be handing over the Panna-Mukta oil and gas fields back to the Government of India's (GOI) nominee i.e. ONGC on December 21, 2019," a joint statement issued by Reliance and Shell said.
Reliance and BG Exploration and Production India Ltd (BGEPIL) hold 30 per cent stake each in PMT while the balance 40 per cent is with ONGC.
"The production sharing contracts (PSC) for the Panna-Mukta and Tapti fields, which were executed by the PMT JV with the Government of India in 1994, will expire on December 21, 2019," it said.
The Tapti fields had ceased production earlier in 2016 and the Tapti process platform facilities were handed over to ONGC (GOI nominee) in 2016.
Decommissioning and site restoration of residual Tapti facilities, including five unmanned platforms and in-field pipelines, are currently being carried out by the PMT JV under India's first offshore decommissioning and site restoration project.
The Tapti decommissioning and other commercial activities would continue in BGEPIL even after Panna-Mukta handover, as per the statement.
The Panna-Mukta fields, off the Mumbai coast, produced 211 million barrels of oil and 1.25 Trillion cubic feet of natural gas since December 1994. In 2019, the average monthly production from the fields was around 10,000 barrels per day of crude oil and 140 million standard cubic feet of natural gas per day.
Speaking on the development, Trivikram Arun, Managing Director, BGEPIL said, "The PMT JV is a great example of a successful partnership between India's largest national oil company (ONGC), India's largest private company (Reliance) and an international oil company (Shell)."
"Our teams have worked relentlessly to ensure a safe handover of the producing fields from the PMT JV to ONGC at the end of the term," he said.
B Ganguly, President-E&P, Reliance said, "At their peak, Panna-Mukta have contributed to nearly 6 per cent of India's oil production and almost 7 per cent of India's gas production in the year 2007-08. Reliance has been a part of this journey and contributed, by providing energy, to the growth and development of India's oil and gas sector."“Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.”