With production from the offshore Panna-Mukta-Tapti (PMT) fields falling, operator Shell India has written to the Union government that it will not be seeking an extension of its production sharing contract (PSC) which is due to expire in December 2019, reports Financial Express.
While Shell India and Reliance Industries hold 30% each in the PMT joint venture, state-run ONGC holds the remaining 40%.
Panna and Mukta are oilfields whereas Tapti is a gas field, all located near ONGC’s Bombay High facility. Shell India confirmed the development in an e-mail to Financial Express. “Following a global portfolio review, Shell has decided not to apply for the extension of the PSC,” it said.
Shell India, an arm of the Hague-headquartered Royal Dutch Shell, one of the largest global hydrocarbon conglomerates, added that it is not actively pursuing sale of its interest in the PMT fields. JV partners Reliance Industries and ONGC have also not shown interest in taking over the fields.
Reliance Industries, while reporting its financial performance for FY18, said the Panna-Mukta fields produced 1.301 million barrels of crude oil and 15.1 billion cubic feet of natural gas in the fourth quarter of FY18, a reduction of 10% in crude oil and a meagre 2% rise in natural gas production on year-on-year basis. “This was primarily on account of natural decline in field, and shut-in of wells due to integrity/loading issues, partially offset by higher availability of wells/satellites due to production optimisation,” the company said.
Shell India told Financial Express the company remains committed to safely fulfil its obligations under the PSC and will be providing all necessary support to the government to ensure a smooth handover of the asset at the end of the PSC. As per the contract terms, while the operator is free to apply for extension or otherwise, the government also has the option to approve extension of contract or otherwise.
Shell India is also into the business of LNG and fuel retailing in India.