ONGC wants the Government to consider ‘suspension of operation’ for its East-Coast ultra deep gas discovery till it is able to find a technical partner.
A senior company official said ‘suspension of operation’ is allowed for areas that fall in the new terrain for whose development the contractor requires technological expertise. This has been a practice in the Gulf of Mexico.
According to industry sources, relief is normally awarded in a
ConocoPhillips, with which ONGC recently entered into a memorandum of understanding for exploration and development of deepwater oil and gas blocks, is the third largest integrated energy company in the US.
For KG-DWN-98/2, ONGC recently got a three-year moratorium so that it can finish its exploratory work by 2013. Its East-Coast discovery, UD-1 in KG-DWN-98/2, is the deepest gas find in the country so far. ONGC estimates that it may hold 4.257 trillion cubic feet (tcf) of in-place gas reserves. The Directorate-General of Hydrocarbons (DGH) is yet to accept the Declaration of Commerciality (DoC) of the find. Based on the deliberations of two appraisal wells, the Block Management Committee lowered the reserves of the in-place volume to 3.938 tcf. ONGC has to drill two more appraisal wells (by December 2013) and then a revised DoC will be submitted.
Of the in-place reserves, the company estimates that 2.55 tcf can be recovered, while the DGH has put the figure at 2.315 tcf.
ONGC has been criticised for its low success rate compared with its private sector competitors. Most of ONGC’s production comes from ageing fields and the Mumbai High offshore.
The public sector major plans to farm out nearly 26 per cent stake in its KG-DWN-2004/6 block in the East-Coast to Japan’s Inpex Corporation. At a recent Board meeting, the proposal could not be considered as it came in late, sources said.
Looking for partners
Inpex Corporation’s operations include acquisition of licence blocks for oil and gas fields, exploration, production and the sale of processed products. ONGC has been looking for partners with technical expertise to develop the areas.
ONGC is the operator of the block with 60 per cent stake; Gujarat State Petroleum Corporation, Hindustan Petroleum Corporation, Oil India and GAIL hold 10 per cent stake each.