ONGC plans to invest $4.05 bn in UD-1 oilfield

State-owned Oil and Natural Gas Corp (ONGC) plans to invest $4.05 billion in producing natural gas from its ultra deepsea UD-1 discovery in a block that sits next to Reliance Industries’ prolific KG-D6 fields.

“We have tentatively planned a capital expenditure of $2.31 billion in producing gas from UD-1 discovery in block KG-DWN-98/2 and another $1.73 billion in operating expenditure,” a company official said.

ONGC submitted the investment to oil regulator Directorate General of Hydrocarbons (DGH) along with a proposal for declaring the discovery as commercially viable. Once DGH approves the commercial viability of UD-1, ONGC will make a formal field development plan (FDP) outlining the specifics of producing gas from the find.

The company has submitted estimated inplace reserves of 3,420 billion cubic feet centered around the UD-1 discovery in Block KG-DWN-98/2 in its Declaration of Commerciality document submitted to the DGH.

About 55.7 per cent or 1904 bcf of these reserves are projected to be recoverable, he said.