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ONGC arrests fall in oil output from onshore wells, posts higher growth despite vintage fields

Business Finance

Press Trust of India  |  New Delhi 

State-owned Oil and Natural Gas Corp (ONGC) has arrested a declining crude oil production trend in its onshore fields and registered a 1.25 per cent rise in output in the fiscal year ended March 2019, top company officials said.

ONGC produced 6.141 million tonnes of crude oil from its onshore fields despite majority of them being more than 50 years old and facing a natural decline.

The company has been able to make a production turnaround through a slew of initiatives, they said.

India's largest oil and gas producer has in recent times faced immense pressure from the government, which has blamed it for the continuing decline in the country's output.

ONGC raising output is critical to meeting Prime Minister Narendra Modi's target of cutting oil imports by 10 per cent by 2022.

ONGC has already reversed years of decline in natural gas output, posting a record 6.5 per cent jump in production to 25.9 billion cubic metres in 2018-19.

However, oil production from offshore fields continues to be on a decline and will only reverse next year when Krishna Godavari basin field KG-DWN-98/2 comes onstream.

Officials said ONGC has monetised five out of the total 13 discoveries during 2018-19 on a fast-track mode which helped contribute to the growth in production from onshore fields.

In order to sustain production and achieve higher onshore growth, ONGC drilled 303 wells during the last fiscal, which is the highest since 2014-15.

The company has also engaged reputed international oil and gas consulting firm Gaffney Cline & Associates for high level review of two major fields of largest onshore producing asset, Mehsana in Gujarat and a few other onshore fields for enhancement of production.

The company has invested about Rs 5,000 crore in the last fiscal in its onshore operations on a number of projects and has a similar investment plan for the financial year 2019-20, officials said.

Talking about the performance, ONGC Chairman and Managing Director Shashi Shanker said: "The growth in onshore production has been achieved beating enormous challenges which cropped up due to ageing of the fields. This has come at a time when fields with similar vintage are facing a sharp decline internationally."

"The onshore fields, which are mostly five-decade old, are faced with increased level of water-cut (the water which comes with oil during production)," he said, adding "while disposing of produced water is a critical issue, the stringent environmental laws and complex land acquisition process make the challenges in onshore quite difficult to surmount."

Shanker said a well-wise focused approach and deploying state-of-the-technology for enhanced oil recovery (EOR) have started paying a rich dividend in not only arresting the decline in production trend but also to grow.

ONGC Director (Onshore) S K Moitra said the company continues to take up various initiatives on the EOR front and as many as six EOR projects have been either implemented or are on the verge of implementation.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Sun, April 14 2019. 11:30 IST