BP To Help ONGC Boost Western Offshore Output By 24% Over Ten Years Under New TSP Deal

State-run Oil and Natural Gas Corporation (ONGC) has appointed BP Exploration Services India, a wholly-owned step-down subsidiary of British energy major BP, as the technical services provider (TSP) for its western offshore fields, excluding Mumbai High, with a target of lifting combined oil and gas output by 24.1% over a ten-year contract period.

The announcement was made on Monday, building on an earlier agreement ONGC signed with another BP subsidiary, BP Exploration Alpha, for the Mumbai High field in January 2025. That contract covers roughly 38% of total western offshore production and has already shown early results, with ONGC reporting stabilisation of production and a moderation in the decline trajectory seen in previous years.

What The New Contract Targets

The technical services provider will assess field performance and identify opportunities across reservoirs, wells and surface facilities to lift output from the western offshore portfolio. The production targets set out in the agreement are:

• Crude oil: Up 10.8% from a baseline of 46.25 million tonnes to 51.26 million tonnes

• Gas: Up 31.5% from 82.68 billion cubic metres to 108.69 billion cubic metres

• Combined oil and oil-equivalent gas: Up 24.1% from 128.93 million tonnes of oil equivalent to 159.96 million tonnes of oil equivalent

Production improvements are expected to become visible from FY27, with full-scale output gains anticipated by FY30.

How BP Gets Paid

The payment structure is designed to align incentives with delivery. BP Exploration Services India will receive a fixed fee for the first two years of the contract.

From year three onward, the fee shifts to a revenue share model based on a percentage of incremental hydrocarbon production after deducting incremental costs. The arrangement means BP's returns scale directly with how much additional output it actually delivers.

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The Western Offshore Basin

The Mumbai Offshore Basin is ONGC's most productive hydrocarbon-producing region, comprising 43 blocks in total. Of these, 28 operate under the nomination regime while the remainder fall under various competitive bidding rounds. The entire western offshore portfolio, including Mumbai High, represents 72.62 million tonnes of oil equivalent in combined output potential.

With the Mumbai High contract already in place and the new agreement covering the remaining western offshore fields, ONGC now has BP providing technical services across its entire western offshore production base.

Sources:

The Economic Times

The Hindu Businessline