Consortium seeks regulator’s nod; production has been falling by 18% a year.
BG India, Reliance Industries (RIL) and Oil and Natural Gas Corporation ONGC) plan to invest at least $1 billion to arrest the fall in production from Panna-Mukta and Tapti (PMT) oil and gas fields off the country’s west coast.
BG India, the operator, will seek permission from the Directorate General of Hydrocarbons (DGH). The aim is to increase production by injecting water. This could increase production by 7 per cent.
ONGC holds 40 per cent in the field. BG and RIL hold 30 per cent each.
The consortium is seeking an extension of the production sharing contract (PSC) by at least five years to make the investment viable. The PSC is expiring in 2019. “There is no point in investing so much when we will not be able to recover the cost. Discussions are on with DGH to extend the PSC by at least five years. An extension till 2024 and beyond will allow us to recover the cost,” said an ONGC executive.
| NEW LEASE OF LIFE |
| * The investment is needed to increase production through water injection, which could raise production by 7 per cent |
| * ONGC holds 40 per cent in the field; BG and RIL hold 30 per cent each |
| * The consortium is seeking an extension of the production sharing contract by at least five years to make the investment viable |
The production has been declining at a rate of 18 per cent a year. The current level is 32,000 barrels oil per day and 11.5 million standard cubic metres gas per day. “We have been talking about addressing the production fall issue since 2007. We require an investment of $1-1.5 billion to increase production by a few million barrels. The process will entail installation of a platform, drilling of wells for injecting water and laying pipelines,” said the executive. He confirmed production had been falling.
The technique involves injecting water back into the reservoir to increase pressure and production. Generally, around 30 per cent oil in a reservoir can be extracted. Water injection helps maintain production over a longer period.
BG is expected to soon make a presentation to DGH. “If at all this project is taken up, it will take time. It is too premature to discuss the issue right now,” said a BG India spokesperson.
A senior DGH official said BG India had discussed the matter, but refused to give further details.
BG shut production last July after leakage in underwater pipelines. The consortium spent Rs 80 crore on repairs. Production resumed in October.
RIL, while announcing in its fourth quarter results, said average price realisation for gas from Panna-Mukta was $5.73 per million British thermal unit and that from Tapti was $5.57 per million British thermal unit.
