ONGC resumes oil output from shut wells

State-run Oil and Natural Gas Corp has resumed oil and gas output it halted earlier on Friday after a pipeline leak caused a mile-long spill off Mumbai's coast, the company said in a statement.

The state-run explorer had shut oil and gas wells and other facilities attached to the Mumbai-Uran Trunk (MUT) pipeline that pumps crude from the Mumbai High field, India's biggest oil producing block, as a safety measure and diverted supplies to the ICP-Heera Uran Trunk pipeline.

The leakage led to a loss of some 25,000 barrels which caused an oil spill about 80 kilometres off the Mumbai coast, the company said.

"It has been estimated that the oil spill will be dispersed within 48 hours," ONGC, India's largest oil producer, said in a statement, adding surveillance and monitoring of operations will continue jointly by the firm and the Coast Guard.

Oil Secretary S. Sundareshan earlier said the pipeline flow had been stopped and described the loss from the leak as "fairly small," limited to just the oil in the pipeline at the time.

A loss of 25,000 barrels is just over 10 percent of daily pumping capacity of the pipeline or about 6.5 percent of the Mumbai High block.

The MUT pipeline has capacity to pump 212,000 barrels per day (bpd).

The Mumbai High block normally produces about 386,000 bpd of oil, accounting for about 52% of the country's overall oil output and 70% of ONGC's domestic output.

A major fire in 2005 at the field destroyed a crude processing platform and cut production sharply. ONGC has been redeveloping the field since.

Shares in ONGC closed 2.6% lower at Rs 1,105.05 apiece, in a Mumbai market which fell 0.2%.