State-owned Oil and Natural Gas Corp (ONGC) on Wednesday said it has made another significant oil and gas discovery in its Krishna Godavari basin deepwater block KG-D5, which sits next to Reliance Industries’ flaging KG-D6 area. Well M-4, drilled 25 km off the nearest coastline, “encountered six hydrocarbon bearing zones with net pay of 78 meters have been established,” the company said in a statement.
During testing, the well flowed oil at a rate of about 3,160 barrels per day and gas at a rate of about 3.19 lakh cubic meters a day. “The discovery has enhanced the value of the block KG-DWN-98/2 and has opened up further area for exploration and appraisal,” it said. ONGC had previously made 11 oil and gas discoveries in KG-D5 block which it is targeting to start producing from in 2018-19.
The discovery in KG-D5 block is besides the four new finds it has notified in the fourth quarter of 2014-15 ended March 31. The firm said in all it made 22 discoveries in 2014-15 and another two, including the one in KG-D5, in current fiscal. Giving details of the discoveries made in the last quarter of 2014-15, ONGC said it struck oil in Gujarat onland block CB-ONN-2004/2 near the town of Nadiad and an oil and gas discovery near Amlapuram in East Godavari district of Andhra Pradesh.
Besides, two gas find was made in Golaghat district of Assam. ONGC said this fiscal it has also made a gas discovery in KG offshore block KG-OSN-2004/1. The well NASG-1 located about 19 km south of nearest coastal temple town of Antarvedi in Andhra Pradesh, was drilled down to a depth of 2555 meters and encountered net pay of 25 meters.
“This is the sixth discovery in the block KG-OSN-2004/1 and will add economic value to the development plan being formulated,” ONGC said. ONGC said the estimated accretion to in-place hydrocarbons from its operated areas in India in 2014-15 stands at 215.65 million tonne of oil and oil equivalent gas. Out of this, oil is 91.87 million tonne and the rest is
natural gas.
During 2014-15, ONGC produced 22.264 million tons of crude oil as against 22.247 million tons in the year before. “Thus continuous decline in production of crude oil over last seven years could be stopped,” the statement said. The growth in production has come from ONGC’s western offshore fields which saw a 7.5 per cent rise to 14.74 million tons.
Govt eases gas field development rules for ONGC, Reliance Industries
Easing rules, the government on Wednesday approved a policy to allow Reliance Industries and ONGC develop a dozen contentious natural gas discoveries worth about Rs 1 lakh crore at current prices. The new policy gives companies options to either develop the finds at their own risk or perform upstream regulator DGH-prescribed conformity tests before developing them and recoup the entire cost. This will “settle the long pending issue with regards to 12 discoveries in five blocks pertaining to Oil and Natural Gas Corp (ONGC) (six discoveries) and Reliance Industries (six discoveries) but will also establish a clear policy for the future,” said an official statement, detailing the decision taken by the Cabinet Committee on Economic Affairs (CCEA). The 12 finds hold reserves of around 90 bcm of gas “which would be valued at over Rs 1 lakh crore at the current gas price of $4.66 per million British Thermal Unit (mmbtu) on Gross Calorific Value (GCV)”, it said. The policy will also help in bringing out transparency and uniformity in decision making as against case by case approach in the past. The CCEA allowed companies to either relinquish the blocks or develop the discoveries after conducting Drill Stem Test (DST) with 50 per cent cost of DST being disallowed as penalty for not conducting the test on time. The cost recovery for carrying out DST would be capped at $15 million. Alternatively, the companies will be allowed to develop the discoveries without conducting DST in a ring-fenced manner i.e. at their own cost. The expenditure incurred in developing these finds will be recouped only if the fields are commercially producible. “If the contractor does not opt for any one of these options suggested above within 60 days of the CCEA approval then the area encompassing these discoveries shall automatically be relinquished,” the statement said. The new policy will help RIL monetise three discoveries in its flagging eastern offshore KG-D6 block. It had notified the Dhirubhai-29, 30 and 31 finds in 2007 and submitted a formal application for declaring them commercial in 2010.