ONGC inks pact with HPCL for sale of oil from Mumbai Offshore fields

25 Sep 2023 , 11:00 AM

The state-owned Oil and Natural Gas Corporation (ONGC) has signed a contract with HPCL to sell crude oil produced from Mumbai offshore fields. This is the second such arrangement in as many months, as India’s leading oil and gas producer favours term contracts over auctions where refiners hammer huge discounts.

ONGC announced a ‘term deal with HPCL for the sale of crude oil from Mumbai offshore,’ on its Twitter handle.

While it did not provide specifics, individuals familiar with the subject said the agreement called for the sale of around 4.5 million tonnes of crude oil per year to Hindustan Petroleum Corporation Ltd.’s (HPCL) Mumbai refinery.

Last month, ONGC entered into a similar agreement to sell 4 million tonnes of crude oil per year plus an extra 0.5 million tonnes to Bharat Petroleum Corporation Ltd (BPCL), which also operates a refinery in Mumbai to transform crude oil into fuels such as petrol and diesel.

ONGC produces 13-14 million tonnes of crude oil per year from its resources in the Arabian Sea, off the coast of Mumbai.

The government scrapped a law that required oil from blocks awarded prior to 1999 to be sold to government-nominated clients, primarily state refiners, in June of last year. The previous restriction had resulted in companies like ONGC and Oil India not receiving the optimum market price.

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