Deep waters may still revive ONGC fortunes

The state-owned firm is banking on untapped resources 160 km off the Mumbai coast to help it meet crude targets, writes SHANTANU GUHA RAY

Burning out Output from the Bombay High platform has not been satisfactory for ONGC PHOTO: CAPT. NANDU CHINTINS

TROUBLED BY low returns from its biggest oilfield at Bombay High, the state-owned Oil and Natural Gas Corporation Ltd (ONGC) is contemplating its biggest deepwater exploration off the western coast.

Central to the effort is an attempt to overcome the challenges of a layer of basalt that extends along three of the basins that make up the Kutch, Kerala and Bombay basins and increase output from Bombay High, where a $3.3 billion (Rs. 14,880 crore) investment has not yielded the desired results.

“We have to find ways to increase output from Bombay High,” Sudhir Vasudeva, ONGC’s director for offshore services, told TEHELKA. The public sector giant is being advised by London-based consultancy Gaffney, Cline and Associates on its Bombay High wells redevelopment plan that could stretch to 2017.

Experts say there are large untapped resources under the sea at Bombay High, 160 km off the Mumbai coast. Production at the field had hit a peak of 20 million tonnes (MT) in 1989, but annual output at the field is currently 11 MT.

ONGC has already pledged a $5.6 billion investment to develop smaller fields to ensure a 12 percent increase in its 25 MT output that has remained stagnant for the past three years. The smaller oil and gas fields off the west coast may produce 1.12 lakh barrels a day of oil and 11.2 million cubic metres (MCB) a day of natural gas by 2013. If that happens, it would represent about 15 percent of our daily oil output.

ONGC will start drilling once it completes a study of new seismic data and reservoir modelling. Earlier, such drilling had yielded little results. “But this time, we hope to achieve success because of our enhanced studies,” says Narendra Verma, who heads the basin management team. Officials said some of the studies are modelled on those undertaken by Petrobras of Brazil that recently achieved immense success. “Some global success should happen,” adds Narendra Taneja of Upstream, the Oslo-based oil and gas newspaper.

Private companies performed better than ONGC and Oil India Ltd (OIL) in terms of production of crude against targets in October, but the two state-owned firms exceeded targets in natural gas production, according to figures released by the Ministry of Petroleum and Natural Gas.

Total crude production by both public and private sector companies in October stood at 3.245 MT, 2.5 percent below the combined target of 3.327 MT. Over the April-October period it was 0.7 percent below target.

OIL produced 311.9 MT of crude from its fields in Assam and Arunachal Pradesh, falling short of its target of 315.3 MT.

ONGC, however, registered its best performance against targets for natural gas production. Although it registered a slippage from its target, its shortfall was lower than that of OIL or the private firms at 1.955 billion cubic metres (BCM) of gas, a marginal 0.9 percent below the month’s target of 1.972 BCM.

Bombay High accounted for most of ONGC’s gas production, with an output of 1.476 BCM while the fields in Gujarat were the most productive among the onshore fields, producing 164.4 MCM, which was 6.6 percent more than the target of 154.3 MCM. Compared with ONGC’s natural gas output, private firms fared quite badly with respect to target achievement. During October, these firms produced 2.188 BCM of gas, which was 6.5 per cent below the target of 2.339 BCM.

shantanu.guharay@fwtehelka.com