ONGC signs Tapti asset transfer pact with RIL-BG consortium

Deal to help expedite Rs 8,600-crore Daman investment plan

A joint venture (JV) led by Reliance Industries (RIL) and BG Group on Wednesday signed an agreement with Oil and Natural Gas Corporation (ONGC) to hand over drilling infrastructure from its abandoned Tapti gas field in Western Offshore to the state-run firm.

The deal, the first-of-its-kind in the Indian petroleum sector, will help the Panna-Mukta-Tapti JV on dismantling costs and give a boost to ONGC’s Rs 8,600-crore investment plan in the nearby Daman offshore and C-26 cluster development projects. The three firms have been at odds for months over the cost of closing the Tapti field off the west coast.

“The JV members have signed the Tapti asset transfer agreement on April 12, 2016 with ONGC. ONGC has committed an investment of Rs 8,600 Crore towards Daman development project and C-26 cluster development project to enhance production of natural gas and condensate from its Daman block in Arabian sea,” ONGC stated.

The equipment transfer deal will help ONGC keep a check on costs including buying and setting up equipment which could cost up to Rs 4,000 crore. The deal will help advance the pace of development by three years.

The mid and south Tapti field was awarded by the government in December 1994 under the production sharing contract (PSC) regime with 40 per cent participation of ONGC and 30 per cent participation each of British Gas and RIL. The JV had earlier informed the government its intention to abandon the Tapti field and associated facilities upon cessation of production.

ONGC later expressed interest in utilising part of Tapti facilities - comprising processing platforms along with the connected export pipelines - for use in its adjacent Daman development and C-26 cluster development projects. The government has now decided to hand over the identified facilities to ONGC as a government nominee in line with the PSC provisions.

The production from the two projects is expected to start in the second quarter of the current financial year (2016-17) with an estimated peak production rate of 11 million standard cubic metres a day of gas and 11,000 barrels of condensate a day.

The construction of 10 wellhead platforms, subsea pipelines and other associated facilities is currently in progress for Daman and C-26 development projects. Drilling rigs have also been earmarked for 36 wells.

ONGC said with the availability of the Tapti process platform, necessary modification and construction works will be carried out expeditiously and gas production can be started from these projects according to schedule.