ONGC seeks to retain Cambay basin block

State-run Oil and Natural Gas Corporation (ONGC) has approached the Directorate General of Hydrocarbons (DGH) seeking permission to retain the Ambe field block, located off the Gujarat coast. It has also asked the regulatory body to waive off liquidated damages on the field.

DGH had earlier said that, since ONGC and Cairn India failed to submit the Ambe's field development plan in time, they would have to relinquish the block or pay liquidated charges and provide a bank guarantee.

With a 40 per cent stake, Cairn India is the operator of the Ambe field, which is located in the Cambay basin and lies around 25 km west of Cairn India’s Lakshmi field. ONGC owns 50 per cent stake in the Ambe field, while Tata Petrodyne has the balance 10 per cent.

Cairn India had discovered oil and gas in the Ambe field in 2001. The company was to submit the development plan to DGH by March 2008, but had missed the deadline as it needed approval from ONGC's board.

Cairn and ONGC want to combine the development of the Ambe field with the North Tapti field, which is owned by ONGC. The fields are in close vicinity of each other off the west coast in the Gulf of Cambay.

“Ambe is a marginal field and developing it on a standalone basis is not economically viable. Thus, we are looking at combining its development with North Tapti. We are planning to take gas from the North Tapti field through Cairn's pipeline in the Lakshmi field. We have requested to the government to allow us to retain the field, while waiving off the liquidated damages,” an ONGC official said.

As part of the field development plan, ONGC proposes to build two platforms in North Tapti, which will be connected to Cairn’s existing pipeline network for processing gas at Hazira.

“It’s a national asset, which could become idle if relinquished. We are better equipped to deal with it and we hope the government considers this,” the official added.

The consortium has, so far, spent around Rs 50 crore for exploration. The entire production of gas will be processed at Cairn’s existing facility at Hazira. Ambe field has a potential of 35 billion cubic feet of gas.