ONGC turns to GSPC's undersea infrastructure for KG gas output

ONGC last year agreed to buy Gujarat State Petroleum Corporation's (GSPC) 80 per cent interest in the KG-OSN-2001/3 block, which sits next to the state-owned firm's KG-DWN-98/2 or KG-D5 block.

"We have divided discoveries in KG-D5 into three groups.

Cluster-1 finds can be tied up to GSPC block infrastructure," a company official said.

ONGC has finalised a $5.07 billion plan for developing the Cluster-II finds by 2019-20. First gas production is envisaged by June 2019 and oil will start flowing from March 2020, he said. Cluster-1 includes fields D, E and G4. These fields are adjacent to Reliance Industries' KG-D6 block and ONGC has accused the Mukesh Ambani firm of draining gas from these by drilling wells close to the boundary.

"We are not touching the discoveries that have been drained out. The remaining ones in Cluster-1 will be tied up with GSPC facilities," the official said.

ONGC, which has firmed up an investment of Rs 34,012 crore (nearly $5 billion) in bringing to production 10 oil and gas discoveries in Cluster-II, plans to invest another Rs 21,528.10 crore in developing the ultra deep sea UD-1 find (Cluster-III) by 2022-23.

The 7,294.6 sq km deepsea KG-D5 block has been broadly categorised into Northern Discovery Area (NDA - 3,800.6 sq km) and Southern Discovery Area (SDA - 3,494 sq km). NDA has 11 oil and gas discoveries while SDA has the nation's only ultra-deepsea gas find of UD-1. These finds have been clubbed into three groups - Cluster-1, Cluster-II and Cluster-III.

From Cluster-II, a peak oil output of 77,305 barrels per day is envisaged within two years of start of production. Gas output is slated to peak at 16.56 million standard cubic metres per day by 2021-end. The official said Cluster-1 field will be developed at an additional investment of Rs 4,259.59 crore and will produce about 3 mmscmd of gas. Cluster-2A mainly comprises oil finds of A2, P1, M3, M1 and G-2-2 in NDA which can produce 77,305 bpd (3.86 million tonnes per annum) and 3.81 mmscmd of gas.

Cluster 2B, which is made up of four gas finds -- R1, U3, U1, and A1 in NDA -- envisages a peak output of 12.75 mmscmd of gas.

Peak output is likely to last seven years, he said.

State-owned Hindustan Petroleum Corporation (HPCL) has joined the Indian consortium negotiating buying a 49 per cent stake in Russia's Vankor Cluster oil fields in the Arctic region.

Originally, ONGC Videsh Ltd, the overseas investment arm of state-owned Oil and Natural Gas Corporation (ONGC), signed an MoU to explore buying a stake in Suzunskoye, Tagulskoye and Lodochnoye fields – collectively known as Vankor Cluster.

Later, Indian Oil Corporation (IOC), Oil India (OIL) and Bharat PetroResources (BPRL), a unit of Bharat Petroleum Corporation, came in using the influence of the oil ministry.

Now, HPCL has shown interest and has joined the talks, sources privy to the development said. Rosneft, Russia's national oil company that owns the fields, wants to retain a majority stake and is keen to sell only up to 49 per cent stake. Sources said OVL is keen to take the largest share of 20 -26 per cent as the project had originally come to it and others joined in later. If OVL takes 26 per cent stake, OIL-IOC-BPRL-HPCL may have 23.9 per cent, they said. Vankorneft, a subsidiary of Rosneft, is developing the Vankor oil and gas condensate field, situated in the northern part of eastern Siberia.

The reserves of Suzunskoye field exceed 56 million tonnes of oil and condensate and 35 billion cubic metres of gas.

Last year, OVL first acquired 15 per cent in Russia's second-biggest oil field of Vankor for $1.27 billion and then bought another 11 per cent for $930 million. The 26 per cent stake would give OVL 7.31 million tonnes of oil.

The consortium of OIL-IOC-BPRL acquired 23.9 per cent stake in the field at a cost of $2.02 billion, giving them 6.56 million tonnes of oil. Rosneft continues to hold the remaining 50.1 per cent shares of JSC Vankorneft. The field has recoverable reserves of 2.5 billion barrels.