BP Plc has won a bid to operate ONGC's giant Mumbai High oil and gas field by offering up to 60 per cent increase in output over baseline, the state-owned firm said on Wednesday.

State-owned Oil and Natural Gas Corporation (ONGC) had in June last year floated a tender seeking foreign partners to reverse declining output at its flagship Mumbai High fields, offering a share of revenue from incremental production plus a fixed fee but not any equity stake.

The tender attracted two bidders - BP and Royal Dutch Shell.

"After the bid evaluation process, BP Exploration (Alpha) Ltd, a wholly-owned step-down subsidiary of BP Plc, UK has been selected as the technical service provider (TSP)," ONGC said in a stock exchange filing.

"The TSP will review the field performance and identify improvements in reservoir, facilities and wells to enhance the production from Mumbai High field. The TSP has indicated a substantial increase in oil plus oil equivalent gas production (up to 60 per cent) from baseline production levels (reputed third-party vetted production estimates with natural decline) over 10 years contract period." ONGC said it had issued an international competitive bidding (ICB) tender on June 1, 2024 to engage a Technical Services Provider (TSP) for Mumbai High Field with expertise in managing complex mature reservoirs and implementing advanced recovery technologies and best operational practices.

Through this ICB tender, the company invited bids from international operators with proven technical expertise, financial strength, and a track record in similar projects.

ONGC sought bids from firms with annual revenue of at least USD 75 billion, according to the tender document.

The TSP would have to do a comprehensive review of the field performance and identify improvements as well as implement suitable technological interventions and practices for improving production and recovery, it said.

Bidders were asked to quote quarterly incremental production they can enable over the 10-year contract period as well as the percentage share of the revenue they want from the sale of oil and gas produced over and above the baseline production.

ONGC did not disclose the bid details.

The TSP, which was selected on the basis of one offering the highest incremental production and the lowest revenue share, will also be paid a fixed service fee for its efforts, the document said.

The Mumbai High field (previously Bombay High field) - India's most prolific oil field - lies some 160-kilometer in the Arabian Sea off the Mumbai coast. It was discovered in February 1974 and started production on May 21, 1976.

The field hit a peak of 4,76,000 barrels of oil per day and 28 billion cubic meters of gas in 1989 and has since seen a gradual decline in output.

It is currently producing 1,34,000 bpd of oil and 13 bcm (less than 10 million standard cubic meters per day) of gas - accounting for almost 38 per cent of India's production and 14 per cent of consumption.

ONGC believes the field still has a balance reserve of 80 million tonnes (610 million barrels) of oil and over 40 bcm of gas and hence needs partners who can help tap them.

With the field seeing a steady decline in output, a stake sale had been considered on at least two occasions in recent years.

A high-level committee headed by the then Niti Aayog Vice Chairman Rajiv Kumar in late 2018 considered "transferring" western offshore oil and gas fields of Mumbai High as also some fields in Mumbai offshore, Assam, Rajasthan, and Gujarat to private/foreign companies.

But that plan met with strong opposition from ONGC and some quarters within the government, three sources with knowledge of the matter said.

While ONGC opposed giving away on a platter to private/foreign sector what it discovered after years of toil and spending billions of dollars over the last four decades, some in government were not convinced by the incremental potential toyed with to get the proposal through, they said, adding that it wasn't clear how the incremental output numbers were arrived at in the absence of any real basin or field study by the panel.

The oil ministry twice in 2021 told ONGC to give away 60 per cent stake, plus operating control of Mumbai High and Bassein fields to foreign companies.

Bassein and Satellite (B&S), adjoining Mumbai High, are India's biggest gas fields that were put to production in 1988.

The 2021 proposal, too, was resisted by ONGC but with the output continuing to decline it has now come up with the TSP model to get technical knowhow for boosting output.

ONGC produced a total of 18.4 million tonnes of crude oil in 2023-24 (April 2023 to March 2024) fiscal year, down from 18.54 million tonnes in the previous year. Gas output declined 3.2 per cent to 19.974 bcm.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.