Oil and Natural Gas Corporation (ONGC) on Monday, 25 May announced the selection of BP Exploration Services India Limited — a UK-based subsidiary of BP Plc — as its Technical Services Provider (TSP) for Western Offshore oil and gas fields, excluding the Mumbai High field. The move is aimed at reversing declining production from mature offshore assets in the Mumbai Offshore Basin through technology-driven recovery improvements.

How the TSP Was Selected

The appointment followed an international competitive bidding process in which global oil majors were invited to submit proposals for enhanced recovery from ageing offshore fields. ONGC said the selection was conducted on merit, evaluating technical capability and projected production upside over a long-term horizon.

Projected Production Gains

For the Western Offshore cluster, BP Exploration Services India Limited has projected a 10.8% increase in crude oil output and a 31.5% rise in natural gas production over the 10-year contract period, compared with baseline levels. In combined oil and oil equivalent gas (O+OEG) terms, production is expected to grow by approximately 24%. According to ONGC, the improvement trajectory is expected to begin from FY27, with full-scale impact anticipated from FY30.

Fee Structure and Scope of Work

Under the arrangement, the TSP will receive a fixed fee during the initial two years, after which compensation shifts to a revenue-linked service fee tied to incremental hydrocarbon production, net of additional costs. The TSP's mandate covers assessment of field performance and recommendations across reservoirs, wells, and surface facilities, drawing on global best practices and advanced recovery technologies.

Building on the Mumbai High Partnership

This engagement extends ONGC's existing collaboration model. The state-run explorer had earlier partnered with BP Exploration Alpha Ltd. for the Mumbai High field, which has reportedly shown early signs of production stabilisation through well and facility optimisation. The Western Offshore TSP arrangement replicates that framework across a broader cluster of mature fields.

Strategic Context and Market Reaction

ONGC has framed the initiative as central to its broader strategy of maximising output from mature offshore assets while sustaining India's long-term energy security. This comes amid sustained pressure on domestic upstream producers to offset natural field decline rates without proportional increases in capital expenditure. Notably, India's dependence on crude oil imports remains above 85%, making incremental domestic output gains strategically significant. Shares of ONGC settled lower at ₹284.90 per share on the National Stock Exchange (NSE) on Monday.