Oil and Natural Gas Corp (ONGC) today said crude oil production at Imperial Energy, the Russia-focused firm it acquired last year, has nearly doubled to 11,500 barrels per day.
"ONGC Videsh (the overseas arm of the state-run firm) has raised production from Imperial's fields, situated in the Western Siberian province of Tomsk, from 6,000 barrels of oil per day to 11,500 bpd in just 6-7 months of taking over," ONGC Chairman and Managing Director R S Sharma said here.
Addressing the shareholders of the company, Sharma said when OVL took over Imperial in January 2009, production had fallen to below 6,000 bpd. It restored output to about 8,200 bpd by May and has now ramped it up to 11,500 bpd.
OVL is targeting 16,000 bpd by the year-end and 25,000 bpd by the end of 2010.
Imperial may next year post maiden cash profits on rising output, a company official said. Imperial had in calendar year 2007 posted cash losses of $40 million, which in 2008 rose to $100 million.
"We hope to cut cash losses to $15-20 million in 2009 and will see cash profits in 2010," he said.
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OVL is currently in the process of consolidating operations and has pushed back major investments to next year.
He also said though production has not matched the previously set targets by the British owners of Imperial, the oil reserves in the fields have gone up to 946 million barrels from that of 920 million barrels when OVL had bid for the company in August 2008.
Imperial had projected crude output to rise to 25,000 bpd (1.25 million tonnes a year) by the end of 2008, but the actual production was hovering around 7,000 bpd when it accepted OVL bid last year. Later the output fell below 6,000 bpd at the time of handing over the company. The output was to increase to 35,000 bpd (1.75 million tonnes) by the end of 2009.
OVL, which acquired the London-listed Imperial Energy for $2.1 billion, had initially planned an investment of an additional $1.5 billion in raising output to 35,000 bpd by the end of 2010 but has deferred it for doing more analytical studies about the field reservoir.
It is investing $209.6 million in developing the fields in 2009 and an additional $46.39 million on exploration.
OVL has cut capital expenditure at Imperial this year. "Right now we are in the process of consolidating operations. The company will conduct field studies and do preparatory work for ramping up output in 2010," the official said.