ONGC, Reliance to invest $ 14 bn in KG Basin
The Krishna-Godavari Basin will see a fresh burst of exploration and production activities in the coming years, which will deliver spill-over benefits to Andhra Pradesh.
Going by recent developments, the oil and gas rich basin will see a total investment outlay of over $14 billion by two oil and gas exploration and production companies—ONGC and Reliance— by 2021-2023.
ONGC’s field development plans envisages production of 15-18 million metric standard cubic metres per day, while Mukesh Ambani-owned Reliance Industries will produce about 25-30 mmscmd.
Together, these two players plan to produce more than 40-43 million tonnes of oil equivalent from the Krishna-Godavari Basin, which has huge potential, according to a senior official of the Ministry of Petroleum and Natural Gas.
In addition to these two majors, investments from other players are also in the pipeline.
Speaking on the sidelines of a meeting hosted by the Ministry to share the progress made under the Open Acreage Licensing Policy in Hyderabad last week, the official said: “While it is a fact that gas production has dropped significantly in the Krishna-Godavari basin from a peak of 65 mmscmd, due to various reasons, including high pressure, high carbon dioxide, high temperature and hostile deep water environs ranging from 1,200 to 2,600 metres, we expect to see more investment and output from the basin, which holds immense potential for the country.”
Five new blocks on offer in KG Basin:
Under the Open Acreage Licensing Policy, of the 55 blocks being offered, with potential area of about 60,000 sq km, five more blocks are now being offered in the KG Basin. These are estimated to hold resources of about 9.555 mmtoe (million tonnes of oil equivalent).
According to data provided by the Director General of Hydrocarbons, the KG Basin comprises 28,000 sq km on-land and 2,02,000 sq km of offshore areas. While barely about 2000 sq. km has been offered, the extent now offered is nearly five times that, covering three onshore and two offshore blocks.
The KG Basin, the country’s richest oil and gas exploration asset, is being closely watched by contractors and investors as it has huge potential. While in the past, the D1 and D3 Blocks had good output, they were affected by water ingress, following which output fell.