BP plc BP, the British energy giant, has teamed up with the Oil and Natural Gas Corporation (“ONGC”) in India to boost output from the Mumbai High oil and gas field, the country's largest oil-producing field. BP will act as a technical service provider for the field. The British energy firm has offered to increase the production from this field by nearly 60%.
The oil and gas field reached peak production levels of 476,000 barrels of oil per day in 1989. However, the production level declined over time. It is currently producing 134,000 barrels of oil per day. Per ONGC, the field still has nearly 610 million barrels of oil and 40 billion cubic meters of gas left. The company sought partners who would help tap into the remaining reserves at the oil field.
India is the world’s third-largest oil importer and consumer. For years, the country has been looking to increase its oil and gas output. In this context, ONGC sought to form a technical partnership with a global energy firm to help it increase the country's oil production.
In June 2024, ONGC issued a tender to find foreign partners to help revive production at the flagship Mumbai High fields. ONGC invited bids from international oil firms with technical expertise, knowledge of recovery methods and a proven track record of managing mature, complex oil fields.
ONGC also mentioned that it would offer the partners a share of the revenues generated from the excess production alongside a fixed fee. However, the company did not offer any equity ownership in the field. The tender floated by ONGC attracted two bidders, BP and Shell. BP was chosen as the technical service provider (TSP) after following a comprehensive evaluation process.
The TSP’s role involves reviewing the field's overall performance and identifying improvements in key areas, including the reservoir, facilities and wells. It is also expected to deploy necessary technical interventions aimed at increasing the field's production. The TSP has offered a significant increase in production of up to 60% from the baseline levelsover the contract period of 10 years.
BP mentioned that it looks forward to leveraging its extensive experience in performance optimization and recovery to help increase the output from Mumbai High.
BP currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are TechnipFMC plc FTI, Sunoco LP SUN and Oceaneering International OII. TechnipFMC and Sunoco currently sport a Zacks Rank #1 (Strong Buy) each, while Oceaneering International carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a high of $14.7 million in the third quarter of 2024, indicating an 11.1% increase from the previous year’s level. This growing backlog ensures strong revenue growth for FTI.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores and distributors. Its current distribution yield is greater than that of the industry's composite stocks, providing unitholders with consistent returns.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading offshore equipment and technology solutions provider to the energy industry. Its proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
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