Bid & Tender

News

ONGC to Start Crude Production from KG-D5 Block in May

ONGC will produce 10,000-12,000 b/d of crude from the KG-D5 block offshore the Godavari river delta in the Bay of Bengal from May, ramping up to a peak output of 45,000 b/d within 2-3 months of the start, said the company's director (offshore) Pankaj Kumar.

 

ONGC originally intended to start gas production from the Cluster-2 deepwater fields in KG-D5 in June 2019, with the first oil output planned for March 2020. But the start has been delayed several times. The floating storage unit that will be used for oil production is already in Indian waters and is in the process of being commissioned, Kumar said.

 

The refiner expects around 2mn m³/d of gas to flow along with the oil from KG-D5. But actual gas production of around 7mn-8mn m³/d will begin in May 2024 and ramp up to peak production of 10mn m³/d within 2-3 years, from 1.7mn m³/d currently.

 

The KG-D5 field is adjacent to the KG-D6 field in which private-sector Reliance Industries (RIL) holds a 66.67pc stake, with the remaining held by BP.

 

ONGC also plans to invest $3.5bn in several projects in the western offshore fields, the official said. The investment will enhance oil and gas production from the western offshore fields, arresting the decline in crude production as well as developing old fields, he added. The projects are expected to be completed within three years.

 

ONGC has made several discoveries of oil and gas in the KG-D5 basin. It plans to start production from the Cluster 1 and Cluster 3 fields in the basin in the coming years. The refiner is open to partnerships for developing the Cluster 3 field, Kumar said.

 

The refiner plans to sell natural gas through the Indian Gas Exchange (IGX), said ONGC director (onshore) Anurag Sharma. The refiner will also auction the gas as production ramps up, he added. But the company will follow the government's current gas price ceiling for difficult fields at $12.46/mn Btu, until the government accepts the recommendations of the Kirit Parikh committee which called for price caps on gas supplied to priority sectors, Sharma said.

 

Domestic gas output from India's offshore fields such as the Mumbai High and KG basin rose by 4.5pc from a year earlier to 17.49mn t (23.2bn m³) in 2022, while gas production from onshore fields remained largely unchanged at 7.8mn t, according to oil ministry data. India's natural gas output was 25.18mn t in 2022, up by 3pc from 2021.

BACK

Related News