The brokerage said ONGC has selected a subsidiary of UK-based firm BP Plc as a technical service provider (TSP) via a bidding process.
This is building on the existing TSP for the Mumbai High Field, which is the largest oil field of the Mumbai offshore basin.
The western offshore basin is ONGC’s key producing asset and comprises 43 blocks, UBS said. The TSP estimates production increase of 10.8% in crude oil and 31.5% in gas, the brokerage said. TSP has estimated the overall production increase of 24.1% over a 10-year contract period, the brokerage added.The TSP will receive a fixed fee for two years. This will be followed by a percentage share of revenue as service fees from net incremental production, UBS said.
ONGC is also scheduled to report its fourth quarter earnings on Tuesday, May 26.
Of the 31 analysts who have coverage on the stock 20 have a “buy” rating, five have a “hold” rating, and six have a “sell” recommendation on the state-run upstream explorer.
Shares of ONGC are off opening highs, currently trading 0.7% higher at ₹286.95. The stock is up 21% so far this year.
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