MUMBAI, July 28 (Reuters) - Indian energy major RelianceIndustries Ltd and state-run exploration firm Oil andNatural Gas Corp have signed an initial agreement toconsider sharing Reliance's offshore infrastructure at the KGbasin, off India's east coast.
Reliance and ONGC will conduct a joint study over the nextnine months to work out a formal agreement and firm upcommercial terms, the two companies said late on Saturday.
Reliance, controlled by billionaire Mukesh Ambani, operatesIndia's largest offshore gas field but has struggled with aslump in gas production over the past two years. It is estimatedto have spent close to $8 billion to develop its blocks in theKrishna Godavari (KG) basin.
ONGC, which has also struggled to maintain production fromits aging wells off India's west coast, hopes to produce from six to nine million standard cubic metres per day (mscmd) of gasby 2017 from its offshore east coast blocks, adjacent toReliance's blocks there.
The agreement will minimise ONGC's initial capitalexpenditure and help in early monetisation of its deep waterfields, ONGC Chairman Sudhir Vasudeva said in a statement.