Oil and Natural Gas Corporation (ONGC) is planning to bring smaller fracking companies in Texas and North Dakota to Indian fields to compete with the dominant oilfield services giants, such as Schlumberger and Haliburton, and bring down prices.
ONGC does part of existing fracking job of about 100 wells annually in-house and outsources the balance to top global firms such as Schlumberger, Haliburton and Baker Hughes. The need to raise output at its onshore fields facing declines for years requires ONGC to use more of fracking—a key part of the oil and gas drilling technique where hydrocarbon formations in a rock are fractured by injecting fluid into cracks to extract oil and gas.
Since it takes long to build internal capacity, ONGC will have to outsource about 100 additional wells per year to fracking companies, Tapas Kumar Sengupta, director (offshore), told ET. A collapsing oil price that has forced explorers and producers to slash tens of billions of dollars from their capital budgets and defer many projects has also made oilfield services cheap and easily available.
With no plans to follow the oil majors in cutting capital spending, ONGC is getting ready to ride the opportunity of cheaper services. In a month, ONGC will hold road shows in the US, with an aim to educate smaller fracking firms about the business opportunity in India.
This post was written by Atlantic Admin