Global cos offer ONGC deep sea drilling rigs for KG gas find
As many as 10 international offshore drilling contractors including Transocean Inc have offered best-in-class deepsea drilling rigs to Oil and Natural Gas Corp (ONGC) for its KG-D5 gas field developments.
ONGC had floated a tender to charter hire two deepwater drilling rigs and one anchor moored rig for bringing gas in Bay of Bengal block KG-DWN-98/2 or KG-D5, which sits next to Reliance Industries’ flagging KG-D6 fields, to production.
“We have received tremendous response to the tender.
International drilling contractors have bid very aggressively,” an official said.
ONGC is among the very few explorers around the world who are actually going ahead with the development campaign despite low oil prices. “And naturally, contractors have no new job outside and so they are queueing up here,” he said.
Transocean Offshore International Ventures Ltd offered Deepwater Millenium, Discoverer India and Discoverer Luanda deepwater rigs while Ensco Maritime Ltd offered two of its rigs, Ensco 8500 and Ensco 8501.
Other bidders include Seadrill Orion Ltd, Drillship Kythnos Owners Inc, Dupont Maritime LLC, Dynamic Drilling & Services, Ensco Maritime Ltd, Queiroz Galvano Leo Gas, Seadrill Orion, Universial Energy Resources Ind, Vantage International management Co and Japan Drilling Co.
ONGC is investing USD 5.07 billion for developing Cluster-II discoveries in KG-D5 block to flow natural gas from from June 2019 and oil by March 2020.
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).
The 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 in three groups Cluster-1, Cluster-II and Cluster-III.
Gas discovery in Cluster-I is to be tied up with finds in neighbouring G-4 block for production but this is not being taken up currently because of a dispute with RIL over migration of gas from ONGC blocks, the official said.
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 to 16.56 million standard cubic meters per day by end-2021.
Cluster-2A mainly comprises of 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, the official said, adding that peak output is likely to last 7 years.
Cluster-III is the UD-1 gas discovery in SDA in ultra- deepsea that poses technological challenges.
Earlier, Ahead of the Budget, state-owned oil producer ONGC and private sector Cairn India have asked the government to cut cess on crude oil saying the switchover from fixed to ad valorem rates had turned things from bad to worse.The producers want the government to cut the cess to 8 per cent of the price they realise on sale of domestically produced crude oil.
In the previous Budget, Finance Minister Arun Jaitley had converted Rs 4,500 per tonne fixed cess on crude oil to 20 per cent ad valorem.
“The 20 per cent cess rate provided benefit for a temporary period only up to moderate crude prices,” their association PetroFed last month wrote to Revenue Secretary Hasmukh Adhia.
With the oil cartel OPEC deciding the cut production, global oil rates have started moving up.
“As a result the domestic producers of crude oil are again feeling the pinch with 20 per cent ad valorem cess and are in fact in a much worse off than before,” PetroFed wrote.
It said there was an urgent need to reconsider the issue and provide the much needed relief to the domestic oil producers.
“On behalf of industry, we would once again like to submit for an expeditious correction in the levy of cess on domestic crude oil production from 20 per cent to 8 per cent of the realised price of crude oil,” it said.
PetroFed said reducing the cess rate would help to expeditiously increase oil production, meeting vision of ‘Make-in-India’ and enhance energy security.