ONGC to pump in $1 bn in eastern offshore oil finds

State-run Oil and Natural Gas Corporation (ONGC) will invest about $1 billion in the oil finds it has made in eastern offshore and will begin production by mid-2010, ONGC Director (Offshore) Sudhir Vasudeva said today. 

ONGC is planning integrated cluster development of oil discoveries in shallow water blocks G-4-6, GS-29, G-4-5 and discoveries in deep-sea block KG-DWN-98/2, he told reporters. 

"First oil is expected sometime in mid-2010," he said. 

ONGC will follow the same model employed by Reliance Industries for producing oil from in the neighbouring predominantly gas rich KG-DWN-98/3 or KG-D6 block.

The company is planning to use a Floating Production, Storage and Offloading vessel that will collect and process oil from wells in the middle of the sea and transfer it to ships for transportation to refineries, Vasudeva said.     

Oil production could be in the range of 8,000 barrels of oil per day to begin with.     

ONGC also plans to tie up 10 gas discoveries in KG-DWN- 98/2 with the G-29, GS-4 and Vashistha gas finds in a shallow water block KG-OS-DW4 in the same KG basin, he said.     

Gas production may begin by 2013, he said, adding Vashistha and neighbouring S-1 discovery alone would yield 6 million standard cubic meters per day of output.     

Overall gas production from the integrated project is estimated at 25 mmscmd. "The Directorate General of Hydrocarbons has approved our appraisal plan for the gas discoveries in deep-sea block KG-DWN-98/2. We plan to drill six appraisal wells to assess the potential and delineate the discoveries," an ONGC official said. 

The block sits next to Reliance Industries prolific KG-DWN-98/3 or D6 block.     

The reserve estimates and production plan in ONGC's appraisal programme, however, excludes ultra-deepwater UD-1 discovery in KG-DWN-98/2 block.     

The UD-1 discovery alone has been certified by DGH to hold just over 2 Trillion cubic feet of inplace gas reserves.

Ten discoveries in KG-DWN-98/2 (excluding UD-1) and three in adjacent block together hold 6.37 Tcf of inplace reserves.

Without UD-1, the block is assessed to hold just over 5 Tcf of inplace gas reserves.ONGC has roped in Statoil of Norway and Petrobras of Brazil as equity partners in the KG-DWN-98/2. Statoil and Cairn India hold 10 per cent stake each in the block and Petrobras 15 per cent, while ONGC has the remaining.

"We plan to drill six appraisal well in KG-DWN-98/2 block and three in KG-OS-DW4. Following this we will prepare a detailed development plan. As of now, we think we will need 58 wells to produce the oil and gas planned for the fields," he said.