ONGC has hired US-based petroleum reserves certifier Ryder Scott to review the hydrocarbon present and recoverable in the 1,850 sq km GSPC-owned block KG-OSN-2001/3 in the East Coast.
This is in the wake of the central government-owned explorer, which is negotiating a deal to pick up a majority stake in the GSPC deep water block, finding that the actual hydrocarbon that could be taken out is far less than the presumed 7.6 trillion cubic feet (tcf) — probably not even half that.
Houston-based Ryder Scott would ‘independently’ review the reserves estimates and a report is likely to be submitted in two-months from now, said a senior official privy to the development. This assumes importance as the value of the deal would primarily depend on the natural gas recoverable from the block.
Post ONGC and GSPC agreeing on the hydrocarbon reserves in the block, where wells are being drilled as deep as 5,000 metres below the sea level, a final outcome of the negotiations would take place. In October 2015, GSPC had given the first presentation to ONGC on the block followed by several meeting between the top honchos of the firms as well as legal teams.
Earlier, reservoir-management firm Gaffney, Cline & Associates had said that the high pressure high temperature with low permeability block gas-in-place of 14.4 trillion cubic feet (tcf) of which 7.6 tcf is recoverable.
ONGC has already provided Ryder Scott the geological data of the block, which is currently being reviewed by the consultant, confirmed another official. GSPC is in the middle of a political storm with the Congress party alleging that the R20,000 crore spent by it so far has been a waste of resources since there is very little gas in the block.
Currently, the output from the block which is under ‘test-production’ is hovering less than 0.5 mmscmd. The company has implemented a hydro-fracking technique that is offering positive results. A new well planned to be drilled later this year is expected to boost the gas output from the block.
GSPC has spent a whopping R14,641.92 crore till March 2015, which exceeds the field development plan target of R13,122.46 crore, to develop single field of the block — Deen Dayal West (DDW). For the entire block, which has other prolific areas such as the DDW Extension and Six Discoveries, an expense of R19,576 crore has been incurred till March 2015.