ONGC to invest $9 bn in producing oil and gas from KG basin
New Delhi: State-owned Oil and Natural Gas Corp (ONGC) will invest over USD 9 billion in bringing to production an array of oil and gas discoveries in its prolific Krishna Godavari basin block off the east coast by 2017-18.
ONGC has made 11 oil and gas discoveries in the Block KG-DWN-98/2, which sits next to Reliance Industries' KG-D6 Block and Gujarat State Petroleum Corp's Deendayal gas field. The block is divided into a Northern Discovery Area (NDA) and Southern Discovery Area (SDA). ONGC plans to invest USD 9 billion in producing from discoveries in NDA.
"We are looking at producing 2.5-3 million tons of oil (per annum) and 9-10 million standard cubic meters per day of gas from the Northern Development Area of Block KG-DWN-98/2," ONGC Director (Exploration) N K Verma told PTI here.
NDA holds an estimated 92.30 million tons of oil reserves and 97.568 billion cubic meters of inplace gas reserves spread over seven fields.
Verma said ONGC has submitted to the Directorate General of Hydrocarbons (DGH) a Declaration of Commerciality (DoC) for the oil find in the NDA and a detailed field development plan will be submitted within a year.
ONGC bought 90 percent interest in Block KG-DWN-98/2 from Cairn Energy India Ltd in 2005. Cairn still holds 10 percent in the block. Before selling most of its stake and giving away operatorship of the block, Cairn made four discoveries in the area -- Padmavati, Kanakdurga, N-1 and R-1 (Annapurna).
Subsequently, ONGC made six significant discoveries -- E-1, A1, U1, W1, D-1 and KT-1 in NDA and the first ultra-deepwater discovery UD-1 at a record depth of 2,841 metres.
The NDA comprises discoveries like Padmawati, Kanadurga, D, E, U, A, while the ultra deepsea UD find lies in SDA.
Verma said ONGC is looking at producing oil and gas from NDA using a floating production, storage and offloading (FPSO) unit.
"We are also studying the economic and technical feasibility of using facilities at neighbouring KG-D6 block," he said.
While oil can be produced and stored at the offshore FPSO before being shipped to refiners, ONGC is exploring if some volumes can be diverted to RIL's infrastructure for onward transmission to Kakinada in Andhra Pradesh from where it can be sold to consumers.
ONGC, which currently produces about 52 mmscmd of gas from its fields, will submit an investment plans for UD-1 separately, he added.
Block KG-DWN-98/2, comprising of 7,294.60 square kilometers, was originally awarded to Cairn in the first round of auction under New Exploration Licensing Policy (NELP) in April 2000. Of this, 2,4623 sq km has been relinquished and ONGC currently holds 3,800.6 sq km in NDA and 3,494 sq km in SDA.