ONGC sees 2 mscm rise in daily gas output from KG

State-run Oil and Natural gas Corporation (ONGC) expects to initially raise its daily gas output by 2 million standard cubic meters (mscm) and produce 9,400 barrels of associated oil once its offshore blocks- G1 and GS-15 in KG Basin start production from May, according to sources.

"According to the plan, initially 2 mscm oil or oil equivalent gas is to be produced from G-1 and GS-15 blocks. It will continue for two years and sustainable tests will be conducted periodically.

Based on the test results, the production will be increased up to 3 mscm. The peak production will be 20 mscm over a period of time," the sources told PTI.

Drilling of two wells out of the three in those two blocks has been completed and the third one is in progress. The additional output will be allotted to the companies which are being supplied gas currently, the sources said.

G1 is located 28 kilometers off Amalapuram coast in water depths ranging from 135 to 500 meters, while GS 15, in shallow waters, is located 5km from the coast in KG basin.

"ONGC has 24 blocks in KG basin. The daily output at present from onshore blocks stands at 840 tonnes of oil per day and 3.8 million metric standard cubic meters per day (mmscmd) of gas.

Increased production will have a significant effect on top line of the company in future as it is expected to produce gas and oil from these fields for the next 15 years with a peak production of 20 mscm per day," the sources said.

Since the blocks were allotted on nomination basis, ONGC gets 60% of the international price for oil and $4.2 per BTU for gas," they said.

Leighton India has been awarded a $17 million contract for work on the G1-GS15 Shallow Water project.

According to Leighton, the work which commenced in December last year is due to be completed by next month.

Meanwhile, ONGC will call for global tenders for data acquisition in the blocks it won in NELP-VIII bid round held last year. The company, in partnership with certain consortia members, won 17 oil and gas exploration blocks.

ONGC had submitted seven bids for deepwater blocks and won all of them. Of these seven blocks, one block is located in KG offshore in which Andhra Pradesh Gas Infrastructure Corporation is also a partner and rest is in the Andaman offshore.

"According to minimum work programme commitment to the Government, seismic survey should be completed in two years after awarding contract. Then interpretation data acquisition will be done. This is a four-year program," the sources said.