Hindustan Oil Exploration Company (HOEC) on Wednesday said it has found oil reserves in a well it drilled in a block 150-km off the Mumbai coast, boosting output prospects from the acreage by 60 per cent to 8,000 barrels of oil and oil equivalent gas per day. HOEC had previously found oil in the very first well it drilled on B-80 block which it had won in a Discovered Small Fields (DSF) bid round.
"We are delighted to report that in D-1 well, production test was carried out over a period of 3 days. D-1 produced significantly more oil during the flow test, compared to first well D-2 test results announced by us on February 24, 2020," the firm said in a statement.
In a telephonic interview with PTI, its CEO P Elango said the company was earlier expecting an output of 5,000 barrels of oil and oil equivalent gas per day which has after the second well been upgraded to 8,000 boepd.
The output includes 5,000 barrels of oil per day and 20 million cubic feet per day of natural gas.
"We have reduced operating cost to help breakeven even during the current low oil price scenario," he said adding operating cost which was about $50,000 per day has been cut by 20 per cent.
The company is planning to begin output from the block by December. "We will begin work to hook up production pipeline to an ONGC facility post-monsoon in October and hope to complete work by December," he said.
HOEC has so far invested $45 million in the block that sits in water depths of 80 meters.
"We plan to leverage the low price environment in oil field services sector to bring down the overall costs. We are determined to continue the momentum and complete the project to deliver the first oil and gas from both the wells as and when the current situation improves," he said.
Block MB/OSDSF/B80/2016 or B-80 is spread over 56 square kilometers area in western offshore and was awarded under the First DSF Bid Round 2016 on March 27, 2017.
HOEC is the operator of this field with 50 per cent Participating Interest. Adbhoot Estates holds the remaining interest.
The Field Development Plan consists of drilling of two subsea wells to produce oil and gas, which will be processed through a Mobile Off-shore Processing Unit (MOPU). The processed oil will be exported through a Single Point Mooring with a Floating Storage & Offloading (FSO) unit having a capacity to store about 9,00,000 barrels and the gas will be delivered to Gujarat gas market by tapping into an existing gas pipeline system of ONGC.
MOPU project is completed and is ready for a sail out from the Middle East and has a capacity to handle 10,000 barrels of oil per day, he said.
"Under the terms of the Revenue Sharing Contract (RSC), the oil and gas produced from this Block enjoys marketing and pricing freedom and is expected to fetch a premium price in the growing gas market in Gujarat, partly being met by imported Liquified Natural Gas (LNG)," he added.