Oil and Natural Gas Corp (ONCG) has announced commencement of ‘first oil’ from its much delayed deepwater Krishna Godavari basin in Bay of Bengal, the company said on Monday.
The KG DWN 98/3 Block is likely to increase the company’s total oil and gas production by 11% and 15% respectively.
The state-owned oil and gas exploration company had executed the Phase 1 of the project in March 2020 with successful production of gas from U field of the KG-DWN-98/2 Block.
The ‘first oil’ was explored on January 7 and the company is now nearing the completion of Phase 2, culminating into commencement of oil production from the ‘M’ field of KG-DWN-98/2.
“The development of this field faced unique technical challenges due to the waxy nature of the crude,” the company said. “The flagship project is on track with Final phase of project with the balance oil and gas fields of the block scheduled to be put on production by mid 2024.”
ONGC expects the peak production of oil to be 45,000 barrels of oil per day and over 10 MMSCMD of gas from the field.
The KG-DWN 98/2 block has a number of discoveries which have been clubbed into clusters – Cluster 1, 2, and 3. Cluster 2, divided into 2A and 2B, is being put to production first.
Cluster 2A was projected to contain 94.26 million tonnes of crude oil reserves and 21.75 billion cubic meters of associated gas, while Cluster 2B is estimated to have 51.98 bcm of gas reserves.
The company had earlier in an analyst call said that it plans to commence oil production from its Krishna Godavari basin latest by November-end.
In the second quarter of the current financial year 2023-24, ONGC produced 5.249 million metric tonnes of crude oil, down 2.1% from 5.360 MMT in Q2FY23.
ONGC’s gas production also declined by 2.8% to 5.2 billion cubic meters in Q2FY24, compared with 5.35 billion cubic meters in the same period last year.