ONGC to spend Rs 5,000 cr on east coast fields

Oil and Natural Gas Corporation (ONGC) plans to invest nearly Rs 5,000 crore in appraisal of its oil and gas fields off the country’s east coast, where production is likely to start from mid-2010.

The company has established a business unit, Eastern Offshore Asset, with the aim to put east coast oil and gas discoveries on a fast track, “through an integrated east coast hub”, chairman R S Sharma told journalists after the company’s 16th annual general meeting. “The oil discoveries in G-4-6, GS-29-1 and G-4-5, part of discoveries in KG-DWN-98/2 and in the Petroleum Exploration Licence Block IG, will be developed through the integrated hub.”

“The oil discoveries in G-4-6, GS-29-1 and GS 4-5, and discoveries in KG-DWN-98/2 are planned to be put to production in 2012-13,” he added.

The company aims to begin production of the first oil from 2010 and production of gas from G-1 and GS 15 fields by 2011 in the area. Crude oil production is likely to go up 29 million tonnes by 2012-13 from the current production of 25.4 mt (2008-09), Sharma said. And that natural gas production is likely to be 72 million standard cubic metres a day (mmscmd) by 2012-13 and envisaged to be 100 mmscmd by 2015-16 from the present 62 mscmd. “The estimates could go up if we take into account the areas where appraisal is currently on,” he said.

To arrest output declines from maturing fields, Sharma said the company has been implementing improved oil recovery and enhanced oil recovery schemes. Seven such schemes are currently on, with envisaged investment of over Rs 16,000 crore. The company is investing over Rs 50,000 crore in developing new oil and gas fields and increasing output from existing ones.

Sharma said the general economic downturn has, however, not impacted the company’s investment plans, as reflected in the highest-ever capital expenditure of Rs 21,820 crore in 2008-09. And, 94 per cent of this was in the core activity of exploration and production. The company’s overseas arm, OVL, separately invested Rs 16,105 crore. The company plans to seek its board’s approval for increase in spending, as it plans to expedite its exploration activities.

ONGC’s shareholders approved a dividend payment of Rs 14 per share at the AGM, which along with the interim dividend of Rs 18 per share totals Rs 32 per share, or Rs 6,844 crore.