State-owned Oil and Natural Gas Corporation (ONGC) on August 25 said it has opened fifth well on its flagship deep-sea project in Krishna Godavari basin in Bay of Bengal, which will help augment production of crude oil and natural gas.
In January this year, ONGC had started producing oil, which is converted into fuels like petrol and diesel in refineries, from the KG-DWN-98/2 or KG-D5 block.
"On August 24, 2024, ONGC marked a significant milestone by starting production from its fifth oil well in the Block KG-DWN-98/2 Cluster-2 asset," the firm informed the exchanges.
"Leveraging the floating production, storage, and offloading (FPSO) vessel, ONGC has begun transporting and sale of associated gas, all the while underscoring its commitment to achieving zero gas flaring," the company said. It, however, did not state how much the new well was producing.
With this, ONGC also successfully commissioned its gas export line from the offshore-to-onshore terminal.
"Earlier in January, oil production commenced from the same asset, with 4 of 13 wells already flowing. Gas production is also advancing, with 3 of 7 wells online," it added.
Located 35 kilometres off the coast of Andhra Pradesh in water depths ranging from 300-3,200 metres, the discoveries in the block are divided into Cluster-1, 2 and 3. Cluster 2 is being put to production first.
As per original plans, oil production from Cluster-2 should have begun by November 2021, but was delayed because of the Covid pandemic.
Thereafter, ONGC set May 2023 as the first Cluster-2 oil production deadline but then extended it to August 2023 and thereafter extended the flow of first oil every month, with the last deadline announced being December 2023. Oil started flowing from January 7, 2024.
Earlier, Moneycontrol reported ONGC’s KG block is expected to reach peak production of 45,000 barrels per day (bpd) of crude oil and 10 million metric standard cubic metres per day (mmscmd) of gas. This would boost ONGC’s overall oil production by 11 percent and that of gas by 15 percent. India’s largest oil and gas explorer commenced oil production from the deepwater field in January 2024, after several delays.
ONGC has drilled 26 wells on the field. Out of these, 13 are oil producing and seven gas producing. The firm expects to open all 13 oil producing wells plus six gas wells by the end of March.
ONGC has hired floating vessel Armada Sterling-V, owned 70 per cent by SPOG (Shapoorji Pallonji Oil & Gas) and 30 per cent by Malaysia's Bumi Armada, for producing oil from below seabed.
The FPSO (floating production, storage and offloading vessel), Armada Sterling-V, had been waiting to receive oil since January 2, 2023, after she was hooked up on December 27, 2022.
In the KG-D5 block, Cluster-1 consists of three discoveries. FDPs (field development plans) of 2 discoveries were approved in 2019. This project is currently in the development stage.
In Cluster-3, there is one ultra-deep water gas discovery which would be the second deepest hydrocarbon discovery in the world, when monetised. The FDP is scheduled to be submitted by January 2026.
ONGC had proposed a FDP for Cluster-2 in April 2018, with an estimated capital expenditure of USD 5.07 billion and operational expenditure of USD 5.12 billion over a field life of 16 years.
ONGC posted a decline of 42.8 percent in consolidated net profit at Rs 10,236 crore in the first quarter of the financial year 2024-25 as compared to Rs 17,893 crore in the same period a year ago.
With PTI inputs
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