ONGC KG Basin gas production: CMD Shashi Shankar rejects all talk of delays, reveals dates

Shashi Shankar, the CMD at India’s biggest oil and gas producer ONGC, in an exclusive talk with Zee Business's Prakash Priyadrshi on the sidelines of the International Energy Forum 16 (IEF 16), said Qatar's response was positive on plans to invest in their offshore assets. The two sides also held discussions on subjects like possible acquisitions, plan to set up the gas trading hub and MRPL-HPCL merger among others. Here are edited excerpts from a comprehensive interview: 

Q: Can you tell us about the opportunities available at the International Energy Forum (IEF)? Talk is that ONGC is looking at opportunities available in Qatar. Can we expect more foreign acquisitions? 
A: International Energy Forum (IEF) is a unique platform that allows consuming and producing nations as well as companies to assemble together. This platform provides networking opportunities to all. We had Group to Group (G to G) meetings and bilateral meetings with companies. During these meetings, the two sides had discussions on available opportunities. When it comes to Qatar, I would like to say that we also had bilateral meetings with Qatar and informed them about our investment interests in their offshore assets. The response was positive. Further, steps will be taken in accordance to the developments. 

Q: Regards KG Basin, it is being said that production will be delayed.
A: First of all, I am not aware of the place from where the news related to delays are coming from. I reject them. KG Basin project is on track. A couple of days back, the honourable minister was there, where we located the first development well. At present, ONGC has deployed three rigs on the Indian waters and they are functional. The work is in progress and we will produce the first gas from there by end 2019 and oil by 2020. 

Q: My next question is related to MRPL and HPCL merger. The market has been expecting that the merger will come to an end in this fiscal. What kind of development should be expected with this merger?
A: If you say that the merger, which will turn ONGC into a vertically integrated energy company in the true sense, will come to an end by this fiscal year, then yes possibilities are there. But I can't put a timeline on it, the merger is a complex exercise and can't be done overnight. 

Q: The Government in recent past said, the country's first Gas Trading hub will be created in a couple of months. How will this trading hub exactly work for ONGC, at least, when seen in the context of the existing gas pricing formula? 
A: It has been a long demand and its creation is going to play an important role for ONGC. Going by the existing gas pricing formula our realisation stands at $3 per MMBTU, that probably stands nowhere to the prices of $10-12 at which the imported LNG is being sold. Once this gas trading hub is established the market will be allowed to decide the correct price for gas and this pricing will definitely help us in getting better realisation for our produce, especially gas. The better realisation will allow us to exploit the available opportunities in terms of exploration.