State-owned Oil and Natural Gas Corporation plans to make a multi-billion dollar investment in the KG-DWN 98/2 Cluster 2 block in FY17, DK Sarraf, CMD, said here today.

"With the new gas pricing model, the discovery had become more viable for production," Sarraf said, adding that the financing decision would be taken in early April. The investment is likely to be about $4-5 billion over the next several years, with the cluster expected to reach peak production of 17 mmscmd of natural gas and 75,000 barrels of oil a day in 2020-2021. The company hopes to monetise the offshore field by 2019, and estimates reserves at about 50-70 bcm of natural gas and 23.5 million tonnes of oil.

The company is also taking advantage of a lower cost environment to drive exploration, with Sarraf saying ONGC is taking "a contrarian view to continue investing upstream. The pool planned capex for the next fiscal is about Rs 30,000 crore but at lower cost of services this time. The investment in the KG basin will be over and above this figure.

In 2015-16, the company approved six projects of projected costs of Rs 14,000 crore and total production potential of 23 mt of oil and oil equivalent of gas. Eleven projects were completed in FY16.

AK Srinivasan, Director. - Finance, also indicated that the auction of marginal fields is likely in the coming June quarter. "The government had provided clarity with regard to taxes, revenue sharing and pricing now. So hopefully the fields will be auctioned by June. "