State-owned Oil and Natural Gas Corp (ONGC) on Friday signed an MoU with Andhra Pradesh government for investing $5.07 billion in developing oil and gas finds off the state's coast by 2019-20.
ONGC will invest $5.07 billion in bringing to production 10 oil and gas discoveries in the Bay of Bengal block KG-DWN-98/2 (KG-D5), which sits next to Reliance Industries' flagging KG-D6 fields.
First gas production is envisaged by June 2019 and oil would start flowing from March 2020. Gas from the offshore field will be brought via sub-sea pipeline to Andhra Pradesh before being transported to end users.
The MoU was signed by ONGC Chairman and Manging Director Dinesh K Sarraf and the state government's Industries Director Kartikeya Misra.
The 7,294.6 sq km deep-sea KG-D5 block has been broadly categorised into Northern Discovery Area (NDA - 3,800.6 sq km) and Southern Discovery Area (SDA - 3,494 sq km).
The NDA has 11 oil and gas discoveries while SDA has the nation's only ultra-deepsea gas find of UD-1. These finds have been clubbed in three groups - Cluster-1, Cluster-II and Cluster-III.
Gas discovery in Cluster-I is to be tied with finds in neighbouring G-4 block for production but this is not being taken up currently because of a dispute with RIL over migration of gas from ONGC blocks, officials said.
From Cluster-II a peak oil output of 77,305 barrels per day is envisaged within two years of start of production. Gas output is slated to peak to 16.56 million standard cubic meters per day by end-2021.