Friday

15


November , 2019
ONGC’s first exploration at the Godavari basin
17:25 pm

Kuntala Sarkar


This December is historic for the Oil and Natural Gas Corporation (ONGC). A long due exploration is expected to start. This exploration field - located in the Bay of Bengal off the Godavari coast - has been termed the KG-DWN 98/2.

Pallab Bhattacharya, Chief, Corporate Communication, ONGC, told BE, “Total project investment for KG DWN 98/2 is around Rs 34,000 crore. We are expecting to produce gas from this exploration field by end of December 2019. The production profile is confidential and still on table. Till now, India’s 75% production is from the Bombay High oilfields. The new offshore project can add a huge contribution to the country’s total production. For this mission, floaters are being imported and mobilised from the UK.”

Project outline

The new offshore field (which is divided into two clusters) is expected to produce 23.52 Million Metric Tonnes (MMT) of oil and 50.70 Billion Cubic Meters (BCM) of gas. Oil from the field is proposed to be transported to the floating production storage and offloading (FPSO) unit through a 21.5 km long dual pipeline. It will be processed at a water depth of 413 metre. Later, the oil will be transported to an onshore terminal. Fugro Voyager, which is a deep water geotechnical vessel, was used during the site investigation. The Platinum Explorer drillship from Vantage Drilling is likely to be used for drilling in this project.

Official data regarding the project informs, “The Cluster 2A is estimated to contain reserves of 94.26 MMT of crude oil and 21.75 BCM of associated gas, while Cluster 2B is estimated to host 51.98 BCM of gas reserves. The clusters are anticipated to produce 77,305 Barrels of Oil Per Day (BOPD) and associated gas at a rate of 3.81 Million Metric Standard Cubic Meters Per Day (MMSCMD).” The development of these two clusters involves the commissioning of 35 wells, including 15 oil producing wells, 12 water injection wells and eight gas producing wells.

Mission

‘Vision 2030 - Natural Gas Infrastructure in India’, a Report by Industry Group for the Petroleum and Natural Gas Regulatory Board, states, “In future, the natural gas demand is all set to grow significantly at a CAGR of 6.8% from 242.6 MMSCMD in 2012-13 to 746 MMSCMD in 2029-30. The share of natural gas in the energy mix of India is expected to increase to 20% in 2025.”

At the KG-DWN-98/2 block in the Bay of Bengal, the depth of water is comparable to ultra-deep fields in the Gulf of Mexico. So, with the huge production estimation, ONGC is expected to fulfill the country’s total oil and natural gas demand in coming years.

Pricing factor

ONGC, being a government undertaking organisation, is dependent on the central government for the pricing. But for this project, ONGC will be given the authority to fix the price, depending on the market, as this project entails severe weather induced risks.

This project was expected to start earlier this year but the organisation failed to deliver. Bhattacharya said, “The norms regarding the project articulate to procure 10% materials like steel and pipes from domestic sources. This year, we had to redesign all the previous orders that delayed the total progress. Delay in mobilisation of the equipment has also been a reason. The prices in the international market also dropped drastically during the last five-six years and we had to rethink our pricing. In February 2016, the price went down to $27 per barrel, which was once $148 per barrel. We even failed to get the lifting cost. However, we look to start production from the third week of December and it will be historic for our organisation.”

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