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Oil and Natural Gas Corporation (ONGC), a state-owned exploration and production company, plans to increase efficiency by 20% and reduce costs by the same amount in response to rising exploration and production (E&P) costs, according to Om Prakash Singh, Director (Technology & Field Services), on the sidelines of the ongoing 2024 India Energy Week.
The company's operating costs are expected to rise significantly, with rig hire rates rising from $30,000 to $90,000 per day, requiring a strategic change towards partnerships and technology sharing to avoid financial risks.
"Our major experience is on the drilling part. We are very comfortable with drilling," Singh stated, emphasising the importance of collaboration in navigating the energy transition and addressing the challenges in the oil and gas sector.
ONGC is engaging with global technology firms such as Schlumberger and Halliburton to explore partnership opportunities supporting its exploration and production activities. Singh highlighted the critical role of offshore operations, which account for about 70% of ONGC's production and are significantly more cost-intensive than onshore operations. The company currently operates 37 offshore rigs and 66 onshore rigs, with plans to increase these numbers to over 40 offshore rigs and 75 onshore rigs by March.
Exploration activities, according to Singh, carry substantial financial risks, with the cost of drilling each well potentially reaching Rs 600-800 crore due to complications. "Exploration is a very risky business. That's why we are looking for partners," he said, pointing out the strategic importance of partnerships in de-risking exploration efforts.
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