ONGC Finds Oil off Andhra Pradesh in India

October 17, 2013

Oil and Natural Gas Corporation (ONGC), facing a prolonged stagnancy in oil production, has got a shot in the arm with one of its blocks in the Krishna-Godavari basin off the Andhra Pradesh coast, close to Reliance Industries’ much-touted KG-D6 field, having been found to hold reserves four times the previous estimate, at 100 million tonnes (mt), The Financial Express reported on October 17. The PSU has stumbled upon rich in-place reserves of oil in block KG-DWN-98/2, earlier believed to hold predominantly gas.

Confirming the find of oil reserves to the tune of 100 mt (700 million barrels) in the block, ONGC’s director (exploration) Narendra Verma told FE that oil was struck in three out of six appraisal wells drilled in the block. “With two more appraisal wells remaining to be drilled, a further upside to oil reserves is possible and the estimate is subject to (upward) revision,” Verma said.

ONGC has lined up a massive capital expenditure plan of around R51,500 crore or close to $9 billion for the block by 2030. The block was awarded to Cairn in the NELP round in 2000, which offloaded a 90% stake to ONGC in 2005 before selling out completely.

As the recovery factor for oil ranges between 25% and 30%, if the current oil estimates hold ONGC might be able to recover around 30 mt or around 200 million barrels of oil from the block. “We are now planning to set up a floating production, storage and offloading unit to store the oil as well,” Verma said.

Copyright: The Financial Express, 2013