Don’t miss the latest developments in business and finance.

Ongc In Oil Hunt At 4 Offshore Sites

Image
Our Bureau BUSINESS STANDARD
Last Updated : Feb 26 2013 | 1:25 AM IST

State-owned exploration and production giant ONGC has decided to drill four exploratory wells in the Bengal offshore block by the end of 2004. This represents a marked escalation of the oil exploration efforts of the company.

The cost of the exercise has been pegged at Rs 280-300 crore. ONGC had invested Rs 170 crore prior to this to collect seismic data.

Earlier, the project was to be taken up in two phases. The first phase envisaged drilling one well in 2003, with drilling of three more to be taken up in the second phase.

Also Read

ONGC had floated tender for a rig which could work in shallow water and drill the single well envisaged in the first phase.

However, the tender did not attract any bids from global companies specialising in this technology or operating such rigs.

As a result, ONGC will float a fresh tender offer by the end of this year. Company officials said unlike the earlier tender, this time the bid would indicate that rigs would be used to drill at all four locations.

Sources said the company could expect a much better response since rig chartering companies can work on better economies of scale under the revised 4-rig tender.

Moreover, the deployment period for shifting of the rig from one location to other would be less, resulting in savings and mkaing the process cost-competitive.

Companies bidding for the revised tender could also bring more than one rig to take up drilling of exploratory wells simultaneously or within a stipulated time.

ONGC would take on lease at least one berth at Kidderpore Dock from Kolkata Port Trust (KoPT) for moving supply vessels to the selected location, which was just 60 kilometre south from the dock complex.

The draft at the drill locations on river Hooghly was a shade above 5m, making exploration a very challenging proposition. The Bengal offshore block was awarded to ONGC under NELP-2.

One factor which would work to the advantage ONGC was the comprehensive two and three dimensional (2D and 3D) seismic data for the region now available with the company.

When ONGC last called for bids, data for entire region could not be provided as compilation for the entire area had not been completed.

The company spent Rs 170 crore for acquiring data for the region. ONGC used the ocean bottom cable technology for gathering the data and the collected information has already been processed, sources said.

It was now being interpreted following which four locations would be precisely identified.

Due to heavy sedimentation in the riverbed, collecting data was a tough job as cables were often lost.

The intervening monsoon made matters worse. Since the specialised cables were very expensive, it added to the cost as well.

Onland drilling soon

The exploratory work for Bengal onland block near Contai in Midnapur district would begin soon. ONGC has started moving one rig from the central region of India to the location.

The monsoon had held up the shifting for a month. ONGC has built the approach road for moving heavy trucks to the location but the roads were damaged in the rain and too weak to take the load.

More From This Section

First Published: Aug 27 2003 | 12:00 AM IST

Next Story