ONGC signs a deal with ExxonMobil for deepwater reserves

India’s Oil and Natural Gas Corp (ONGC) signed a deal with global oil major ExxonMobil Corp for deepwater exploration in India’s eastern and western coasts.

Under the deal, ONGC and ExxonMobil will put their attention on the deepwater reserves in India’s East and West coasts.

The signing of the Heads of Agreement (HoA) ends ONGC long drawn search of finding a global oil major to partner with in an attempt to quickly monetize its reserves.

India’s 53 per cent basin area is offshore. However, it requires sophisticated machinery and manpower to extract the oil from such difficult terrains. ONGC is a giant in the industry but it still lags behind in technological prowess which Exxon is expected to bring onto the table, under the new partnership.

India is the world’s third-largest importer and consumer of oil. More than 85 per cent of the country’s oil demands are met by overseas countries, which puts a tremendous strain on the exchequer.