ONGC oil output to rise 11%; gas to jump 60% in 3 years

ONGC had in 2014-15 broken a seven-year jinx of dipping crude oil production by recording a marginal rise

After arresting a seven-year decline in crude oil production, state-owned Oil and Natural Gas Corp (ONGC) will see an 11 per cent rise in output over the next three years as it brings newer fields in production.

ONGC had in 2014-15 fiscal broken a seven-year jinx of dipping crude oil production by recording a marginal rise in output to 22.262 million tonnes as against 22.247 million tonnes in the previous year.

"We are investing heavily in marginal field developments, results of which have started to accrue. This year, our crude oil production is likely to be 24 million tonnes," a senior company official said.

In 2016-17 fiscal, output will further rise to 24.80 million tonnes and in the following year, to 24.81 million tonnes.

The company had produced 23.71 million tonnes of crude oil in 2011-12, which declined to 22.56 million tonnes in the following year.

ONGC's fields are as old as 50 years. Its prime Mumbai High, which accounts for nearly 60 per cent of its oil production, is 40 years old.

"The fields are off their peak. Mumbai High field, which had touched a peak of 20.574 million tonnes in 1989-90, has dipped to 9.211 million tonnes in 2014-15," he said adding the company's focus on developing small and marginal fields is now paying off.

The increase in output will primarily come from offshore fields, particularly off the west coast. In FY15, offshore production had risen to 14.74 million tonnes from 13.71 million tonnes a year ago.

The official said natural gas production will see a steeper rise -- from 64 million standard cubic meters per day output in 2014-15 to 66 mmscmd in current fiscal (2015-16) and to 102 mmscmd in 2018-19.

"We have a series of gas fields that will come into production between now and 2018-19. As a result, the production will rise to 73 mmscmd in 2016-17, to 87 mmscmd in 2017-18 and finally to 102 mmscmd in 2018-19," he said.

The official said ONGC is investing Rs 24,188 crore in six major field developments and another Rs 17,490 crore in redevelopment of three currently producing fields including Mumbai High and Heera fields.

These investments do not include the over $8 billion that the company is planning to spend on the Krishna Godavari basin gas block of KG-DWN-98/2 or KG-D5.

"KG block investment has not yet been approved by the board. The others are all sanctioned investments," he said adding KG-D5 is likely to begin producing oil and gas from 2018-19.