ONGC faces challenge of natural decline in onshore oil wells

Rutam Vora Updated - March 25, 2014 at 06:55 PM.

Ageing wells in Gujarat cause decline in crude oil output

Public sector energy major, ONGC is faced with a double whammy, where on one side it is facing depleting oil production from its onshore fields in Gujarat, while on the other new finds are not picking up pace.

 

As per the recent data by the Ministry of Petroleum and Natural Gas (MoPNG), ONGC’s oil production in Gujarat during April-February period stood at 45.1 million tonnes, against 47.5 million tonnes recorded during same period last year, showing a decline of 5 per cent.

 

The Ministry noted the reason for decline in oil production in Gujarat saying, “Ageing of fields resulting decline in reservoir pressure and increased water cut affected production.”

ONGC has three onshore assets in Gujarat under Mehsana, Ahmedabad and Ankleshwar.

 

Gujarat produces about 74 per cent of the ONGC’s total 61.43 million tonnes (April-February 2013-14) of oil production from onshore fields. However, nationally it has reported year-on-year decline of 3.1 per cent.

 

“Average daily oil production of Ahmedabad asset is 3900 tonnes per day (TPD). This had peaked to 5000 TPD in 2008-09,” said J G Chaturvedi, executive director and asset manager, Ahmedabad Asset – ONGC.

 

“Natural decline is a matter of concern. We are exploring options to arrest the decline and ramp up output. So, next fiscal, we hope to maintain 3900 TPD level,” he said.

 

Gujarat, where ONGC did its first oil discovery at Cambay basin in 1958, has most of its oil wells as old as over 20 years. The rate of natural decline in oil output is higher in older wells, while nature of reservoir is also an important factor.

 

Industry data shows the global rate of natural decline in oil output is around 7-8 per cent, while ONGC’s national average is 2-3 per cent. “In Gujarat, rate of natural decline in output is around 8-9 per cent mainly because of the most number of old wells,” Chaturvedi said.

 

Of the seven onshore assets of ONGC countrywide, Ahmedabad Asset is operational since April 1961. Ahmedabad Asset is spread across four districts of Gujarat over an area of more than 6,200 sq km having 22 fields, and over 1,200 wells in production. The production is being obtained through 65 installations.

Published on March 25, 2014 13:19