Oil and Natural Gas Corp (ONGC) strikes oil & gas at 3 locales

Oil and Natural Gas Corp (ONGC), India’s biggest energy explorer,  on Thursday announced discovery of three new assets – two in Krishna-Godavari basin and the third in Agartala in Tripura.

A company official called these  discoveries “substantial”, but refused to divulge any information regarding their tentative reserve base.

“We will disclose some numbers after April 18,” he said.

Analysts said while these discoveries may not be as substantial when compared with ONGC’s base of oil and gas production, on a standalone basis these were good ones.
They, however, refused to hazard a guess on the estimated reserve base.

ONGC produced 26.92 million tonne of oil and 25.51 billion cubic metres of gas in fiscal 2012, which is expected to rise marginally in the current fiscal.

The company plans to invest Rs4,050 crore to  upgrade its Arabian Sea infrastructure to extend the assets’ life and boost production.

“With the implementation of various redevelopment projects in western offshore, the fields are expected to be on production beyond 2030,” it said.

ONGC’s western offshore operations comprise the flagship Mumbai High assets, Neelam and Heera, and the Bassein & satellite fields. These assets are located in the Arabian Sea, towards the western part around Maharashtra and Gujarat.

Currently, the company is producing a little above 30 million tonne per annum of oil from the western offshore and has been pumping in money to maintain the production plateau at that level.

The company will invest around Rs2,913 crore on revamping 48 platforms across Mumbai High, and Neelam and Heera. The company will also spend another Rs1,140 crore on reconstruction of two process complexes in the prolific Bassein and satellite fields. These fields were commissioned in 1987 and 1989, respectively.

These complexes handle and process acidic and corrosive gas for onward dispatch to ONGC’s Hazira gas processing plant, and have already reached their normal design life of 25 years. Work on these complexes would be completed by 2014-15, the company said.
The total revamp is expected to be completed by pre-monsoon 2016.

“We are well funded internally for this kind of capex at least for the next two years, beyond that we will see. If our internal accruals are good, we will continue to use our cash to fund all the expansion,” said a senior company official.

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