India’s Oil and Natural Gas Corporation (ONGC) has reached an agreement with Hindustan Petroleum Corporation Ltd (HPCL) to sell crude oil produced from fields offshore Mumbai.
In a post on X, formerly Twitter, ONGC said: “Strengthening synergies among the ONGC Group, ONGC inks Term Agreement with HPCL for sale of crude oil from Mumbai offshore.”
ONGC, which is owned by the Indian Government, did not provide the details about the transaction.
However, ONGC will supply around 4.5 million tonnes per annum (mtpa) of crude oil to HPCL’s refinery in Mumbai, reported PTI, citing sources, via the Economic Times.
“This is the second term agreement sealed for sale of Mumbai Offshore crude oil post Marketing Freedom,” ONGC added.
Last month, a similar agreement was inked by ONGC and Bharat Petroleum Corporation Limited (BPCL) for the sale of 4mtpa of crude oil, with an option to supply 0.5 million tonnes of additional crude.
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BPCL also has a refinery to convert the crude oil into fuels such petrol and diesel in Mumbai.
ONGC’s oil fields in the Arabian Sea, off the coast of Mumbai, produce 13–14mtpa.
In June 2022, the Indian Government abolished a law requiring oil from blocks awarded before 1999 to be sold to government-nominated clients, primarily state refiners.
Due to the oil norm, oil producers such as ONGC and Oil India did not receive the best market price.
Following the amendment in the rule, ONGC began holding quarterly auctions for crude oil produced in the western offshore Mumbai High and Panna/Mukta fields.
Earlier this month, ONGC said that it plans to invest nearly $2bn (Rs166.23bn) in its petrochemical unit ONGC Petro-additions Ltd (OPaL).
The investment in OPaL is part of a financial restructuring and will see the Gas Authority of India leave OPaL as a shareholder.
OpaL operates a large petrochemical facility in Dahej, Gujarat.