ONGC- Oil and Gas discoveries
On 23 June ’09, we came across the news that ONGC has made three oil and gas discoveries. First, the Natural Gas in the IE block in the KG basin. Second, Oil in Charada-3 in the Cambay basin. Third, Oil & Gas in Matar area in Vadodara district.
ONGC made 28 oil and gas discoveries in FY09 and the management has clarified that these 3 oil discoveries are a part of discoveries made in the last fiscal i.e. FY09. Earlier, there was news that the K-G basin find could have an estimated reserve of 10 trillion cubic feet (TCF) of gas against the Reliance KG gas discovery of 11.5 TCF. But the mgt has said that drilling is needed to estimate the size of these three.
According to ONGC, the discoveries are confirmed and after the approval of the Directorate General of Hydrocarbon (DGH), it will take around three to four years to commence production from these fields.
India has been an energy-starved country’s with a huge demand-supply gap in the natural gas sector. India currently imports almost 80% of its energy needs. Currently, the natural gas demand is 197 mmscmd, where as the supply is just 154 mmscmd. The demand is expected to increase to 280 mmscmd in FY12.
IE block in KG basin:
This is the second discovery made by the company in the KG basin. Here, the production volumes are expected to be very promising and ONGC is exploring the possibility of producing this high-pressure gas fields “by subsea to onshore terminal” concept, so that its proximity can shore.
Charada-3 oil flield:
It is not easy to produce oil discovered from Charada with conventional methods. But ONGC has well experience of handling oil production issues of similar nature in oil fields such as Santhal, Balol and Lanwa, so, here we are expecting oil production soon. To gain maximum recovery of oil from the field, ONGC is analyzing many options such as thermal in-situ, steam injection and microbial-based solutions.
Matar oil and gas field:
Here , the oil in the well is flowing at the rate of 40 m3/d from the second interval. Location wise, this field is on the eastern margin of the Bharuch block, hence, this oil discovery is very important for ONGC.
How these discoveries are important?
These discoveries at this stage will impact positively, as far as investor perception of India’s hydrocarbon reserves is concerned, especially since it comes two months ahead of the next round of bidding for oil and gas blocks under NELP-VIII.
The discoveries are important in the sense that ONGC needs to scale up its share of new oil and gas find vis a vis to its older fields. ONGC is constantly replacing its old and depleting reserves of oil and gas with new discoveries. Point to be noted here that ONGC’ reserve-to-replacement ratio is almost 1:4, compared to global averages of 1:1. So , the company has to discover new oil fields to maintain this ratio.
