ONGC to monetise marginal fields

State-run Oil and Natural Gas Corporation (ONGC) plans to invest about Rs 26,000 crore in putting 50 onshore and offshore fields on production, 49 through in-house efforts and one through service contract.

ONGC’s efforts to monestise these fields stems from two things — a burgeoning demand for natural gas and the absence of any significant onland gas find. “For some time, we have not discovered any giant field on land. Our efforts are on to find big ones, but except for Cairn India’s Rajasthan field, no other company has been able to discover any big find,” ONGC Chairman A K Hazarika had told Business Standard.

The company, which accounts for 79 per cent of India’s crude oil and 54 per cent of natural gas production, said it had taken a strategic decision to improve production by early development and monetisation of new and marginal fields. “The recent oil price rise has given a new dimension to field development economics and many of the discovered fields which were considered to be unviable are no longer marginal,” the company said in an emailed statement.

The price rise helps the company to cut down the burden of subsidy on it. Being a gas and oil producing company, it shares the burden of oil marketing companies by giving them discount on crude oil produced by ONGC. Better returns on crude oil makes it profitable for ONGC to produce from marginal fields that have small reserves which are otherwise unviable to put into production. The marginal fields are discovered fields but are considered uneconomical for development at one point of time under fiscal, technology or regulatory regime.

Out of a total 165 fields, ONGC has surrendered one field. Fifty fields have been monetised; 84 are under monetisation and 30 under exploration/appraisal/delineation.

“Since about 84 per cent of total ultimate reserves of marginal fields is locked in offshore, ONGC has taken initiatives for development of offshore marginal fields on priority. As a result, seven fields (D-1, SB-11, Vasai East, C-22, C-24, B-134, and GS-15) are already put on production and 10 fields (D-1P, B-22, B-193, B-46, NorthTapti, Cluster-7, WO-16, SB-14, BHE, and G-1 and GS-15) development schemes covering 30 offshore fields are under implementation,” ONGC added.

These fields will be put on production by 2013-14 and will contribute significantly to enhance production. The company would be investing about Rs 26,000 crore in the same.

In addition, ONGC is developing 10 onshore fields through service contract and another 20 fields (13 onshore + seven offshore: KD, B-174, B-51, SD-4, SD-14, D-12 and D-31) have been identified for development through outsourcing. Cumulative production from the offshore marginal fields comprising 13 clusters and 37 fields will be 45 million tonnes of oil and condensate and 64 billion cubic meters of gas over a period of 10-15 years.

ONGC has so far produced about 12 million tonnes of oil and oil equivalent from marginal fields till March 31, 2011. About 2.4 million tonnes of oil and oil equivalent was produced during 2010 -2011.

The company is also studying the progress of Daman fields comprising of C-23, C-26, B-12 and C-24.