ONGC Videsh Ltd (OVL) has drawn a road map to revive the sagging output at its Imperial fields by induction of new technology from the next fiscal. The company has invited expression of interest for gaining access to new technology to produce oil by drilling new wells this year.
“The problem with Imperial is of production and not of reserves. Conventional technology was not helping us and we needed some innovative technologies. We are in the process of securing technology that may be finalized in the next couple of months. I am sure that Imperial production will go up once the new technology is implemented,” a senior OVL executive told Business Standard. "We would produce only up to a particular cost and not at any cost. If we are not earning money the technology is no good for us".
| Imperial is OVL’s biggest acquisition |
| Acquired for $2.1 billion in 2009 |
| Imperial interests comprise of 7 blocks in Tomsk region of Western Siberia |
| OVL’s oil production was 0.770 mt in 2010-11 |
OVL acquired Imperial Energy Corporation Plc, an independent upstream oil exploration and production company, having its main activities in the Tomsk region of Western Siberia, Russia in January 2009 for $2.1 billion. This remains OVL’s biggest buy till date. OVL invested another about $500 million in the asset.
OVL had decided not to invest more money until it found a suitable technology. “So far the focus was on identifying a better technology and therefore we did not drill additional wells”, he added.
Imperial is the holder of several hydrocarbon exploration and production licenses in the Tomsk region of the Western Siberian basin of the Russian Federation and is actively engaged in exploration and production activities in nine exploration license blocks and five production licence blocks, measuring about 13, 400 square kilometres.
Imperial is producing around 15,000 barrels of oil per day, lower than the projected output. Imperial today contributes to 10 per cent of OVL’s 8.75 million tonne output.
Being part of West Siberian basin, Bazhenov shale is understood to be well developed in Imperial’s licensed blocks. The Ministry of Finance of the Rusian Federation has recently prepared a draft law introducing amendments for introduction of zero mineral extraction tax in respect of oil produced from oil deposits of Bazhenov formation. Imperial believes that on account of this significant development, there exists potential for economic exploitation of hydrocarbon reserves from the Bazhenov Shale formation.
“We are working with Russian government on tax. They have proposed some changes that will be approved soon. We need to see how much relief we get. The government is serious about increasing prod from tight reservoirs since all producers are getting affected”, he added.
Today, OVL realises less than $20 from a barrel’s price of $100 after paying taxes and transportation charges.
Imperial’s licensed blocks contain a number of low permeability tight oil reservoirs holding about 2.1 billion barrels of inplace oil spread in 12 oilfields including an oilfield named Snezhnoye. Imperial believes that there exists significant potential for exploitation of hydrocarbon reserves from the low permeability tight oil reservoirs of Snezhnoye oilfield and is desirous of engaging potential technological solution providers for its economic exploitation.
