Norsk Hydro of Norway is keen to take 30 per cent stake in Oil and Natural Gas Corporation's gas discovery block in Krishna Godavari basin, but the state-run firm is willing to give only 22-24 per cent stake.
The Norwegian company, which has already taken a 10 per cent stake in the KG-DWN-98/2 block, has the right to double its interests before the gas discoveries are put to production but it is now keen on operatorship and a higher stake in the block, company sources said.
ONGC is in dire need of deep water production technology and is likely to agree for a joint operatorship of the block but is not willing to give 30 per cent stake in Norsk Hydro.
Besides Norsk Hydro, Petrobras of Brazil has 15 per cent stake in the block that sits next to Reliance Industries' prolific D6 block off the east coast, while Cairn India has 10 per cent. Petrobras has right to double its stake to 30 per cent.
Sources said, in the event of Norsk Hydro being given 30 per cent and Petrobras also doubling its stake, ONGC would be left with just 30 per cent stake and would be on equal footing with the Norwegian and Brazilian companies, a scenario the state-run company does not want to land up in.
ONGC, they said, may settle for 22-24 per cent stake for Norsk Hydro but an agreement is some way from now.
The company mulls an investment of $5.3 billion in developing gas finds in KG-DWN-98/2 and an adjoining block to produce 25 million standard cubic metres of gas per day (mmscmd) by 2013.
Sources said, ONGC has submitted an appraisal plan to oil regulator Directorate General of Hydrocarbons for the gas discoveries in deep-sea block KG-DWN-98/2.
Ten discoveries in the KG-DWN-98/2 block are to be tied-up with G-29, GS-4 and Vashistha gas discoveries in a shallow water block KG-OS-DW4 in the same basin.
The 13 discoveries hold 6.37 Trillion cubic feet of inplace reserves, according to ONGC.
The reserve estimates and production plan in ONGC's appraisal programme, however, do not include its ultra-deepwater UD-1 discovery in KG-DWN-98/2 block. The UD-1 discovery has been certified by the DGH to hold just over two trillion cubic feet (Tcf) of inplace gas reserves.
It also plans to produce 8,000 barrels of oil on a daily basis from the fields.
Sources said, the company plans to drill six appraisal wells in KG-DWN-98/2 block and three in KG-OS-DW4. Following this, it would prepare a detailed development plan.
The appraisal drilling would take a minimum of 18 months and development drilling that would begin sometime in 2010 would entail 58 wells to produce oil and gas planned for the fields.
