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State-owned Oil and Natural Gas Corp (ONGC) will invest around $9 billion in bringing to production an array of oil and gas discoveries in its prolific Krishna-Godavari basin block off the east coast by 2017-18.
ONGC has made 11 oil and gas discoveries in the Block KG-DWN-98/2, which sits next to Reliance Industries (RIL)’s KG-D6 block and Gujarat State Petroleum Corp’s Deendayal gas field. The block is divided into a Northern Discovery Area (NDA) and Southern Discovery Area (SDA).
ONGC plans to make that investment in producing from discoveries in NDA.
“We are looking at producing 2.5 million tonnes (mt) to three mt of oil (a year) and nine-10 million standard cubic metres a day of gas from NDA,” N K Verma, director (exploration), said here. NDA holds an estimated 92.3 mt of oil reserves and 97.6 billion cubic metres of inplace gas reserves spread over seven fields.
Verma said ONGC had submitted to the Directorate General of Hydrocarbons (DGH) a declaration of commerciality (DoC) for the oil find in NDA and a detailed field development plan would be submitted in a year.
ONGC bought 90 per cent interest in Block KG-DWN-98/2 from Cairn Energy India in 2005. Cairn still holds 10 per cent in the block. Before selling most of its stake and giving away operatorship of the block, Cairn made four discoveries in the area — Padmavati, Kanakdurga, N-1 and R-1 (Annapurna). Subsequently, ONGC made six significant discoveries — E-1, A1, U1, W1, D-1 and KT-1 in NDA — and the first ultra-deepwater discovery UD-1 at a record 2,841 metres.
NDA comprises discoveries such as Padmawati, Kanadurga, D, E, U, A, while the ultra deepsea UD find lies in SDA. Verma said ONGC was looking at producing oil and gas from NDA using a floating production, storage and offloading (FPSO) unit.
“We are also studying the economic and technical feasibility of using facilities at neighbouring KG-D6 block,” he said. While oil can be produced and stored at the offshore FPSO before being shipped to refiners, ONGC is exploring if some volumes could be diverted to RIL’s infrastructure for onward transmission to Kakinada in Andhra Pradesh, from where it can be sold to consumers.
ONGC, producing about 52 mscmd of gas from its fields, will submit investment plans for UD-1 separately, he added. Block KG-DWN-98/2, comprising 7,294.60 square kilometres, was originally awarded to Cairn in the first round of auction under the New Exploration Licensing Policy in April 2000. Of this, ONGC holds 3,800.6 sq km in NDA and 3,494 sq km in SDA.
