BG, ONGC, RIL line up $140 million for Panna-Mukta fields

The UK-based BG group and its partners -Oil & Natural Gas Corporation (ONGC) and Reliance Industries - will invest $140 million in the Panna oil and gas fields, offshore Mumbai, to target new reserves and expand current production.

The fresh declaration by the three partner comes on the back of a similar investment plan of $140 million announced in September 2003.

The development plan comprises construction and installation of two new wellhead platforms and associated infield pipelines to connect to the existing processing and compression platform.

The plan is to maximise the field's potential and contract awards for the new facilities are scheduled to be made in April.

The BG and Reliance groups will contribute $42 million each while ONGC will contribute $56 million towards the investment in proportion to their shareholding in the Panna, Mukta and Tapti fields.

BG and Reliance group hold 30 per cent stake each in the fields while ONGC holds 40 per cent. The current production from Panna, Mukta and Tapti fields contribute to seven per cent of India's oil & gas production. Nearly two years back, British Gas acquired Enron Oil & Gas India's stake in the fields.

BG India chief executive officer Nigel Shaw said, "BG India and partners are proceeding with investment plans to target undeveloped areas of the Panna field. By applying advanced drilling techniques to extract oil and gas from the field's complex reservoir, and with gas rate management, the consortium will be able to access the economic reserves to realise the full potential of the field."

The drilling schedule, to begin in the second quarter of 2005, includes six horizontal wells from one platform and five horizontal wells from the other platform.

The implementation of the expansion programme is expected to result in gross incremental recovery of 18 million barrels of oil and 74 billion cubic feet of gas. First production is expected in the third quarter of 2005.