ONGC's KG basin crude output dips to 28K bpd; peak gas expected by mid-2026

ONGC now expects peak gas production of 10 mmscmd from KG-98/2 by mid-2026, even as crude output declines to 28,000 bpd, prompting well interventions and BP-led technical support

State-owned exploration giant ONGC has witnessed a further decline in crude oil production from its deep-water block in the Krishna Godavari (KG) basin to 28,000 barrels per day (bpd), against the company’s peak output estimates of 45,000 bpd.

 

Crude oil output from ONGC’s KG-98/2 block has been sliding since production commenced in January 2024. The firm’s crude output from the block was around 35,000 bpd in 2024, declining to 30,000 bpd by the end of the June quarter of the current fiscal (Q1FY26).

 

“Oil production has gone down. We need to take action as far as the wells are concerned. We are expecting these to recover and production should increase. We would have to do additional work for this production to ramp up to 45 (thousand bpd),” said Vivek Tongaonkar, director of finance at ONGC in an analyst call.

 

Why is ONGC’s KG-98/2 production missing earlier targets? 

ONGC’s overall oil production was expected to rise by 11 per cent and that of gas by 15 per cent by the end of 2024-25, given the company had met peak production estimates. It had set a peak target of 45,000 bpd for oil and 10 million metric standard cubic metre per day (mmscmd) for gas from the KG basin block — a downward revision from its 2017 estimates of 78,000 bpd of oil and 15.57 mmscmd of gas.

 

The company now expects peak gas production of 10 mmscmd from KG-98/2 by the middle of 2026, said Tongaonkar. The current gas production from the block stands at 3 mmscmd. ONGC has engaged energy major BP as subject matter expert to diagnose root-cause issues and identify well interventions to boost production in the 98/2 block.

 

For the current financial year ending March 2026, ONGC expects standalone crude oil production at 19.8 million metric tonnes (mmt) and gas output at 20 billion cubic metres (bcm), marginally lower than previous estimates. “For KG-98/2, currently, we are having 28,000 barrels of oil per day, and that is what is actually affecting our production estimates for this year,” the official said.

 

ONGC is targeting crude oil production of 21 mmt and gas production of 21.5 bcm for fiscal 2026-27.

 

When will Mumbai High benefit from BP’s technical support? 

ONGC’s technical partnership with BP to boost production from Mumbai High, situated on the west coast, is likely to show results from January 2026, said Tongaonkar. ONGC had selected BP as technical services provider (TSP) in early 2025 to boost output from its Mumbai field.

 

“It should start giving us some green shoots from January onwards. We are happy to note that we are already seeing a certain uptick happening in our production of oil and gas for the MH field,” the official said.

 

Under the collaboration with BP, ONGC targets a 44 per cent increase in oil production and an 89 per cent jump in gas output from Mumbai High, unlocking up to $15 billion in incremental revenue over 10 years. Peak production is expected after three to four years from the beginning of the project.