India’s Oil & Natural Gas Corp. (ONGC) plans to invest $30 billion during its 11th 5-year plan (FYP) covering fiscal years ending in 2012.
This investment total is 60% more than that of the prior FYP. It follows ONGC’s recent offshore gas discovery in the Krishna Godavari basin and the success of its overseas subsidiary ONGC Videsh Ltd. (OVL; OGJ, Jan. 15, 2007, Newsletter).
OVL will invest 453.34 billion rupees in the upcoming FYP, compared with 250.52 billion rupees in the 10th FYP. Its downstream group, Mangalore Refinery & Petrochemicals Ltd., will invest 83.16 billion rupees, compared with 7.65 billion rupees under the previous plan.
The company’s fiscal 2006-07 exploratory efforts led to 22 discoveries, of which nine were new prospects-three deepwater, one shallow-water, and five onshore, said R.S. Sharma, ONGC chairman and managing director.
“A total of 88 exploratory and 178 development wells were drilled in fiscal 2006-07,” Sharma said. “We recorded the highest in-place reserves accretion in the last 11 years-169.52 million tonnes of oil equivalent.” He said the company was looking at “in-place volumes of more than 100 million tonnes” from the discoveries.
“We are looking at production of over 140 million tonnes of crude oil and 112 billion cu m of gas during the 11th plan,” he said.
ONGC no longer plans to build a 3-4 million tonne/year refinery in Rajasthan, saying the project, like an earlier dropped plan for a 7.5 million tonne/year refinery, is not economically viable (OGJ, July 24, 2006, Newsletter).
Gas from the Krishna-Godavari basin is expected to start flowing in 2012. Development plans for gas finds in Block KG-DWN-98/2 will be complete by yearend 2008. ONGC has made six gas discoveries on the block, the largest being one discovered in December 2006, which holds probable in-place reserves of 2.08 tcf.
Deepwater collaborations
ONGC is collaborating with Norsk Hydro Production AS, Eni, British Gas, and others-mostly for deepwater exploration and production.
Hydro will extend technical support to develop deepwater oil and gas blocks off India and has agreed to acquire a participating 10% interest in ONGC’s KG-DWN-98/2 deepwater block in the Krishna Godavari basin on which ONGC recently struck gas.
ONGC held that block on a nomination basis before the advent of the New Exploration Licensing Policy (NELP). ONGC has 32 offshore exploration blocks under NELP, with 12 in ultradeep water, 14 in deep water, and 6 in shallow water. It holds 100% participating interest in 12 of the 26 deepwater blocks.
An investment cap of $26 million would be imposed during the appraisal phase, with an option to increase the holding by another 10%. ONGC said Hydro may seek participating interests in other ONGC NELP blocks once the companies examine data during the next 6 months.
The agreement envisages cooperation between ONGC and Hydro in developing India’s continental shelf.
ONGC plans to utilize the expertise of the Norwegian company on development and production from deep water and ultradeep water and “thin oil development and production” in Vasai East, near Bombay High.
