ONGC lines up huge spend in KG Basin
ONGC lines up huge spend in KG Basin, State-owned ONGC is set to develop 45 drilling wells at a block in Krishna-Godavari basin at an estimated cost of over Rs 16,000 crore.
To invest Rs.16,000 cr to develop 45 drilling wells
- Envisages beginning production in 2019
- Peak output at 4.5 million tonnes a year
- It is 20% more than previous estimates
New Delhi: State-owned ONGC is set to develop 45 drilling wells at a block in Krishna-Godavari basin at an estimated cost of over Rs 16,000 crore.
The oil and gas major has approached the Ministry of Environment and Forests, seeking clearance for preparing terms of references, according to the minutes of meeting of Expert Appraisal Committee.
"It is proposed to carry out development drilling in Northern Discovery Region by drilling 45 numbers of wells including oil, gas and water injection wells. The proposed drilling locations are more than 25 km distance i.e., 12 nautical miles away from the coast line. Total cost of the project is Rs 16,200 crore," according to the minutes. ONGC will begin production in 2019, with a peak output of 4.5 million tonnes a year, 20 per cent more than the previous estimates.
The oil discovery in Krishna Godavari basin block KG-DWN-98/2 or KG-D5 will be the first large oil production from the east coast. The block also has 10 gas discoveries, ONGC had earlier said.
KG-D 5 sits next to Reliance Industries' producing KG-DWN-98/3 or KG-D6 area. KG-D5 is divided into a Northern Discovery Area (NDA) and Southern Discovery Area (SDA).
Investment in NDA may be at least USD 9 billion, a senior company official had said, adding that it holds an estimated 92.30 million tonnes of oil reserves and 97.568 billion cubic metres of in place gas reserves spread over seven fields. ONGC bought 90 percent interest in Block KG-DWN-98/2 from Cairn Energy India Ltd in 2005. Cairn subsequently relinquished its remaining 10 percent interest in favour of ONGC.
According to the minutes, "Produced hydrocarbons shall be evacuated by utilisation of GSPC infrastructure for the produced gas from cluster-1 of NDA & G-4 of PML.
The produced gas from Cluster-II is planned to be transported by sub-sea pipeline to an onshore terminal through landfall point to nearest coastline of Odalarevu.