In a bid to boost crude oil production from mature fields, India’s state-owned petroleum explorer Oil and Natural Gas Corporation (ONGC) plans to increase focus on Enhanced Oil Recovery (EOR) projects after a policy incentivizing the activity is formulated, new Chairman and Managing Director Shashi Shanker has said.
"We expect to undertake more of EOR activities after a policy to incentivize it comes out. There are existing policies around incentivizing EOR in other countries. This is a positive step by the government," Shanker said.
The policy is expected to benefit the company which garnered an incremental gain of 7.36 Million Tonne (MT) through EOR activities last fiscal year contributing to 35 per cent of ONGC’s crude oil production. Also, ONGC spent around Rs 5,195 crore on EOR activities in 2016-17.
The new policy is aimed at arresting the declining trend in domestic crude oil production. The upstream regulator of the country Directorate General of Hydrocarbon (DGH) had called for stakeholder consultation for the policy in April this year and appointed consultancy firm Deloitte to undertake a study on the best practices existing worldwide on EOR.
“We are still working on the policy. Deloitte made a presentation to us on the issue recently. There is no deadline as such to formulate this policy but we intend to give a draft of the policy to the government with our inputs in 15-20 days,” a senior DGH official told.
ONGC is working on a plan to invest Rs 57,825 crore on 28 EOR projects to tap an additional 194 Million Tonne of Oil Equivalent (Mtoe), according to information available on its website. Of the 28 projects, the company has already completed 23 projects at a cost of Rs 47,567 crore helping it tap more than 112 MT of additional crude by the end of 2016-2017.
ONGC’s former CMD D K Sarraf had in April this year told the company had forwarded its inputs to DGH and EOR will not be economically feasible without incentives due to low price scenario in the oil and gas sector. “There is a lot of scope to enhance domestic production in the country by deploying EOR techniques. Deploying EOR is a capital and time-intensive process. In the past, the industry has taken 10 years to successfully commission EOR projects. We are trying to bring it down to five years,” Sarraf said.
He had also said EOR techniques have been deployed in most of ONGC's operating blocks and the company is now focusing on cost-effective operations in offshore blocks.
ONGC and Cairn India currently deploy EOR techniques in mature fields. State owned Oil India Limited had also recently signed a Memorandum of Understanding with the University of Houston to collaborate in the fields of improved oil recovery (IOR) and enhanced oil recovery for production enhancement from mature fields.