Oil and Natural Gas Corporation (ONGC) will not give any equity stake in its flagship Mumbai High oil and gas fields to any foreign company and is only seeking help from global giants like BP Plc to help reverse declining output from the field, a top government official said on Tuesday.

The foreign company will get a share of revenue from incremental production plus a fixed fee for its efforts, while ONGC will continue to be the operator and incur all the capital and operating expenditure in implementation of the technical solution, the official said.

All risks will be borne by ONGC, while the foreign partner will get the fixed fee even in case of a failure.

"Mumbai High is a field that was given to ONGC on nomination basis and the company has no authority or power to sell a stake in any nomination field," the official said. "What ONGC has done is floated an international tender to seek technical services providers (TSP) to reverse years of decline in oil and gas production from the field." India is more than 85 per cent dependent on imports to meet its requirement of crude oil, which is converted into fuels like petrol, diesel and LPG in refineries, and roughly half of the consumption of natural gas, which is used to generate electricity, make fertilizers, converted into CNG to run automobiles and piped to household kitchens for cooking.

Having spent USD 175 billion on import of oil and gas in the fiscal year ending March 31, 2024, the government is keen on raising domestic production to cut reliance on imports.

But ONGC has not been successful in reversing the decline in output that has set in the 50-year-old field.

"Clearly, the production has been declining. So ONGC is now looking for some technical help from outside," the official in the ministry of petroleum and natural gas said.

ONGC on June 1, floated an international tender seeking global technical services providers (TSP) with annual revenue of at least USD 75 billion. 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.

Bidders have been 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.

Bids are due by September 15, 2024.

The TSP, who would be 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, according to the tender document.

The official said only the government can sell stake in a nomination field like Mumbai High and so far there is no decision to that effect.

He said there are only a handful of companies globally with USD 75 billion and having expertise in oil and gas exploration and production. "There is ExxonMobil, Shell, TotalEnergies (of France), Chevron and BP." Besides, these global giants, Saudi Arabia's Aramco, the world's largest oil producer, as well as Chinese firm PetroChina also meet the tender norm but it is not clear if they will be allowed to bid.

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 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.

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