ExxonMobil Corporation XOM, the U.S.-based oil and gas giant, along with British energy majors Shell plc and BP plc, is considering a potential partnership with India’s Oil and Natural Gas Corporation (“ONGC”). ExxonMobil, BP and Shell have engaged in preliminary discussions with ONGC for a partnership in the KG-DWN-98/2 deepwater block.

Challenges in the KG-DWN-98/2 Block

This deepwater block is in the Krishna-Godavari (KG) Basin, off India’s eastern coast, is viewed as a promising asset. However, it has suffered setbacks, causing delays, and its production has been lower than expected due to technical challenges.

ONGC now plans to establish a partnership with a global energy firm that has the resources and technical know-how to tackle the complexities associated with this block. It is looking for a partner that can help it understand the complex geology of the basin and overcome production difficulties, specifically in Cluster 2. This is the only region in the block that is currently producing hydrocarbons.

ExxonMobil Emerges as the Most Likely Partner to ONGC

Earlier, Shell and BP had expressed their interest in a partnership with ONGC. However, challenges loom as BP is already involved in a partnership with Reliance in India, in another block in the KG Basin. The partnership between BP and Reliance is already going through a legal dispute with ONGC, which poses uncertainties for a potential collaboration between BP and ONGC. Shell, on the other hand, did not proceed with an opportunity related to Mumbai High earlier this year.

Looking at these developments, ExxonMobil emerges as the most probable candidate to partner with ONGC. However, any confirmation regarding the same has not been received. ExxonMobil’s CEO, Darren Woods, had visited New Delhi earlier in 2025, which has raised speculations on the potential partnership between the ONGC and the U.S. energy giant.

Heavy Financial Investment Requirements

The current production from the KG-DWN-98/2 deepwater block comes in at 33,000 barrels per day of oil and 2.5 million standard cubic meters of gas per day. The partnership with ONGC is expected to be complicated, given that the Indian state-owned energy company will require significant financial investment from the partner firm. This implies that the external partner will not be serving as a technical advisor only. The partner firm will be required to financially participate in the arrangement.

Previously, ONGC has collaborated with foreign firms, wherein the latter served as a technical advisor. However, in the case of the KG Basin, drilling costs are extremely high due to its complex geological features, making passive advisory roles entirely unviable. This is why ONGC needs partners who can share financial risk.