ONGC to invest another Rs. 21,500 cr. in KG Basin
The gush of investments by State-owned ONGC in KG basin continues unabated. Clearly, for ONGC, the offshore basin, off the coast of Kakinada in Andhra Pradesh, holds out rich promises.
Last year, the oil explorer had firmed up an investment of Rs 34,000 crore ($ 5.07 billion) to bring to production 10 oil and gas discoveries in its Bay of Bengal block KG-D5.
Now, the company plans to invest another Rs 21,500 crore ($ 3.2 billion) in the block. This time it is meant for its ultra-deep sea (UD)-1 find, which is considered to be India’s deepest gas discovery till date.
With this investment, ONGC plans to unlock the UD-1’s potential for oil and gas by 2022-23, which will help it more than double its output from its flagship KG Basin block.
“We have submitted to the Directorate General of Hydrocarbons a declaration of commerciaility (DoC) for the UD-1 find. We will submit a final investment plan, called the field development plan, by end-2017 and hope to bring the discovery to production by 2022-23,” a senior official of the company was quoted as saying in the media.
ONGC plans to drill nine wells on the discovery that lies in water depths of 2,400-3,200 metres and will produce a peak output of 19 million standard cubic metres per day.
Earlier, the company was toying with the idea of developing other discoveries in the KG-D5 block and leave the ultra-deepsea find for a later date, as it thought there was no suitable technology to bring out gas from such high water depths.
But, soon its consultants showed ONGC how discoveries deeper than the UD-1 were put into production in recent times, especially in the Gulf of Mexico.
“A recent expression of interest (EoI) meeting we had for developing the KG finds saw several consultants offering solutions for such water depths,” the official said.
ONGC is now in the process of appointing a consultant who will assist in developing the UD-1 discovery.
The 7,294.6 sq km deep sea KG-D5 block, which sits next to Reliance Industries’ KG-D6 fields, has been broadly categorised into Northern Discovery Area (NDA – 3,800.6 sq km) and Southern Discovery Area (SDA – 3,494 sq km).
The NDA has 11 oil and gas discoveries while SDA has the nation’s only ultra-deepsea gas find of UD-1. These finds have been clubbed into three groups – Cluster-1, Cluster-II and Cluster-III.
Last year, the company finalised a USD 5.07 billion plan for developing the Cluster-II finds by 2019-20. First gas production is envisaged by June 2019 and oil would start flowing from March 2020, he said.
The Culster-1 field will be developed at an additional investment of Rs 4,259.59 crore and will produce about 3 mmscmd of gas.