With output falling from its ageing Mumbai High and other Western Offshore fields, state-run Oil and Natural Gas Corp (ONGC) will invest Rs 6,000 crore in new and existing fields in this fiscal to raise output.
“Our capex for development of Western and Eastern Offshore fields for this fiscal is Rs 6,000 crore. It will be funded from internal accruals,” a top company official said.
The explorer is currently developing its eastern offshore Krishna Godavari basin finds, G1 and GS 15.
“GS 15, a shallow-water field will flow first gas from April next year. G1 will take time as it is a deepwater field, but will start production from April 2011,” the official said.
ONGC envisages a production of 0.982 million tonnes (MMT) of sweet or low-sulfur crude and 5.92 billion cubic metres (bcm) of gas over a period of 15 years from G1 and GS 15.
“The two fields put together will produce two million standard cubic metres per day (mmscmd) of gas. The onshore oil and gas processing terminal at Odalarevu, on the coast of Andhra Pradesh, is ready,” he said.
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The gas to be produced has still not been tied up for sale, the official said, adding that the company hopes to sell it at market determined rates.
G1 is located 28 kilometers off Amalapuram coast in water depths ranging from 135 to 500 meters, while GS 15 is located 5 kilometers from the coast in KG basin.
So far, nine exploration wells have been drilled in G1 and eight wells have been drilled in GS 15.
The upstream firm is simultaneously developing Vasishtha and S1 fields in KG basin, which are projected to produce nearly six mmscmd of gas from 2013-14.
Reservoir pressure at ONGC’s two-decade old fields has declined with continuous production, prodding it to embark on major development and redevelopment of new and marginal fields in Western Offshore (WO).
In the WO, it has begun development of C-Series, B-22 Cluster, B-193 Cluster, Heera/South Heera and other marginal fields. The Board has also approved the Phase II redevelopment of Mumbai High South and Mumbai High North.
“After redevelopment of Mumbai High South, our oil and gas output will increase by 3.5 per cent,” the official said.
ONGC is targeting gas output of around 60 mmscmd this fiscal, same as in the past three years.
Besides, it produces nine mmscmd from its joint venture in Panna and Mukta fields in WO.
Meanwhile, the company may see its natural gas output almost double to 100 million cubic meter a day (mmcmd) by 2015-16 as the nation’s most profit making firm puts into production newer discoveries.
ONGC, which may produce 60 mmcmd gas this fiscal, was projected to see output fall drastically to one-third by 2020 due to the natural decline in its ageing fields.
The company will, however, bring three new fields into production to reverse this trend and has projected its output to rise to 66 mmcmd by 2012-13, according to the firm’s presentation to the Petroleum Ministry last month.
The Western Offshore (WO), Cluster-7 and Vashista & S1 fields in the eastern offshore would help taper the fall to 30 mmcmd by 2020.
If discoveries such as UD-1 find in ultra deep waters of Krishna Godavari basin which are under conceptualisation stage are included, the output will rise to 100 mmcmd in 2014-15 and it would be at least 20 per cent more than the output in 2020-21, it said.
ONGC Chairman and Managing Director R S Sharma said the WO Cluster fields would produce a little less than 2 mmcmd in 2012-13 while Cluster-7 would produce 2 mmcmd. The biggest upside would come from Vashista and S1 fields that are projected to produce just under 6 mmcmd from 2013-14.“If we add the discoveries for which plans are conceptualised, the output will rise to 70 mmcmd in 2012-13,” Sharma said.
He said the discoveries to be conceptualised include the 167 billion cubic meter of reserves in KG-DWN-98/2 block, lying adjacent to Reliance Industries’ prolific KG-D6 fields in Krishna Godavari basin off the east coast.
Besides, an estimated 200 bcm reserves lie to be realised in Mahanadi deepwater discoveries, 25 bcm in KG shallow waters and 15 bcm in B and C-Series fields. These discoveries could yield between 40 to 50 mmcmd, he said.
Gas production from Bassein and its Satellite fields, ONGC’s largest fields, is to dip to about 13.8 mmcmd in 2011-12 from 27.5 mmcmd in 2007-08.
As a result of natural phenomenon, reservoir pressure at the gas field has declined with continuous production for over 20 years. Bassein field was discovered in 1977, some 80-km west of Mumbai and when in 1988 it began gas production, recoverable reserves were estimated at 226 billion cubic meters (7.98 trillion cubic feet). The reserves are now estimated at about 58 billion cubic meters (2.04 Tcf).
Bassein field accounts for 43 per cent of ONGC’s gas production. Gas output from Bassein during 2008-09 is estimated at 27.3 mmcmd which will fall to 22.75 mmcmd in 2009-10 and to 17.7 mmcmd in 2010-11.
Gas production from Mumbai High will decline from 14.59 mmcmd in 2007-08 to 8.7 mmcmd in 2011-12 while the same from Neelam, Heera and B-173 fields would dip from 2.7 mmcmd to 2.06 mmcmd.
Sharma said ONGC hopes to make up some of the decline by putting into operation new and marginal fields.