ONGC eastern offshore gas output may hit 2 MMSCMD by Sept

Two wells set to get into production, PSU plans to hire 4 more rigs

State-owned ONGC Ltd expects to ramp up natural gas production up to 2 million metric standard cubic meters per day (MMSCMD) during the next fiscal as two of its eastern offshore wells are set to get into production.
    
Ashok Varma, Executive Director (Asset Manager) Eastern Offshore Asset, said the oil and gas major has chalked out a programme to take up drilling of 40 to 45 wells by 2019.
    
The eastern offshore wing of the PSU has also sent proposals to hire four more rigs to meet the requirements.
    

"With these two wells, the total production from the eastern offshore will be about two million cubic meters gas. These are gas fields. We get very little oil which is negligible. As of now we are getting 6.5 lakh cubic meters of gas and 50 cubic meters of oil from the eastern offshore wells per day," Varma told PTI.

    
The additional gas production expects to give a fillip to the company's topline as C Rangarajan's gas pricing formula is expected to come into force from April.
    
Barclays Equity Research had earlier estimated that the price will be $8.3 per million British thermal unit in 2014-15 as against the current rate of USD 4.2. This will rise to $9.1 in the following year and then to $9.4 in 2016-17.
    
Varma added that these two wells are located in G1 and S1 fields, which are situated around 28 km from the shore.
    
ONGC, which has 24 blocks in KG Basin, currently produces 840 tonnes of oil per day and 3.8 MMSCMD of gas from its onshore blocks, a senior official of ONGC had earlier said.

"After April or May, we expect the production to cross one MMSCMD and subsequently when the second well comes up for production in August or September it will go up to two MMSCMD," Varma said.
    
ONGC currently has ten exploratory drilling wells in the eastern offshore fields besides three operational wells (two oil producing wells and one deep water oil producing well).
    
On the future drilling plans, Varma said they have chalked out a programme to take up drilling in 40 to 45 wells by 2019.
    
"We have sent proposal for hiring four more rigs. The executive committee of the ONGC will take up the proposal sometime this month. All the 40 to 45 wells are located in KG Basin and they are of NELP and licensed blocks," he said.

    
The ONGC started gas supplies from G1 structure in the KG-Basin and currently supplies 0.5 MMSCMD of natural gas to existing gas power projects in Andhra Pradesh, the AP Government had said recently.