The place where energy giants BP Plc and Reliance Industries Ltd. found a sea of trouble, is being ventured into by India’s Oil & Natural Gas Corp.
Tapas Kumar Sengupta, ONGC’s director for offshore operations said that to help boost natural gas output and raise crude flows, the state-run company plans to invest in a region off India’s east coast. According to Oil Minister Dharmendra Pradhan about 648 billion rupees (about $10 billion) in deepwater projects in the Krishna-Godavari Basin will be spen by the nation’s top explorer.
By studying hurdles faced by other companies, it can pry more out of the resource-rich area, believes the Bottom of Form
ONGC. Producing only 9 percent of its target is a project in the same area run by Reliance and partner BP.
“The east coast is our future because western offshore fields are in a heavy declining trend,” Sengupta said in an interview in his office in New Delhi. “To keep India’s gas production alive, the east coast needs to make a tremendous contribution in the next two decades.”
According to Sengupta, within five years, about 40 million standard cubic meters to daily gas production will be added from the region including its KG-DWN-98/2 block, the country’s biggest hydrocarbon producer expects. That’s almost half of India’s net gas production of 84 million standard cubic meters a day from April 2016 to February this year. He said that oil output could rise by 77,000 barrels a day.
Oil Minister Pradhan said in parliament on March 20 that compared with a target of 29.32 billion for the fiscal year ending March 31, gas production at the KG-D6 block was 2.64 billion cubic meters during the 11 months to February.
After water and sand started entering them, the wells producing gas from the KG-D6 block were forced to be shut down by Reliance, controlled by India’s richest man Mukesh Ambani, and BP. Because of natural decreases of deposits in the wells and low flow pressure, production also declined.
ONGC may be helped in avoiding similar pitfalls by technological developments over the past few years. “We have confidence the technology can mitigate the risks of developing such high-risk areas,” Sengupta said. The problems that have afflicted others have also taught the company a lesson or two.
He said that ONGC has been helped in analyzing the reservoir’s characteristics by the “extensive” appraisals in the area done by the company in the area. ONGC has started early production from a deepwater well in the area that’s near the Reliance-BP block to test the rates of hydrocarbon flows.
“The well has been producing 1 million cubic meters a day since May without any decrease in flow,” Sengupta said.
The area is comparable to some of the deepest areas in the world, including Royal Dutch Shell’s Stones and Perdido projects in the Gulf of Mexico as the energy deposit lies in the Bay of Bengal below up to 2,900 meters of water.
“Challenges are huge in deepwaters and the biggest challenge was to establish the flow assurance,” Sengupta said. “Unless and until you are confident about the volume, you cannot propose something to your stakeholders.”
(Adapted from Bloomberg)