State-run ONGC is discussing technology tie-ups with global energy giants like Shell and Petronas for several offshore gas fields. The company has also firmed up plans to start drilling operations in a clutch of new fields, including the promising DWN-98/2 block in the deep waters of the Bay of Bay of Bengal, in a bid to arrest a declining trend in hydrocarbon production.
“We expects oil production to start growing again in the next couple of years,” a senior company executive told FE. “For offshore assets, we are looking at tie-ups with southeast Asian companies, Petronas and others. Even with (the UK’s) Shell, we are in early stages of discussions for deep-water discoveries, floating LNG units etc,” the official said, underscoring the importance of technology tie-ups for new ventures like small LNG units.
As for the Category II basins of Mahanadi, Bengal, Andaman, Kutch, and Saurashtra, and the Andamans, acquired under the open acreage licensing policy (OALP), drilling operations (for oil) will begin by the end of this fiscal, the person added. Under OALP blocks, the licence-holders are allowed to carve out areas they want to explore.
Talking about oil production from the KG 98/2 basin, the source said that the field is likely to reach its peak production of 45,000 barrels per day (bpd) of crude oil and 10 million metric standard cubic metres per day (mmscmd) of gas by the end of the current financial year. “By month-end, there will be some real changes.. and production numbers will improve. We have just connected 6 of the 20 wells. Once these wells start getting connected for oil and gas, the production definitely is going to go up.”
ONGC produced 4.576 million tonnes in Q2FY25 against 4.545 million tonnes in Q2FY24. During April-October this fiscal, the company produced 10.3 million tonnes of oil, down from 10.6 million tonnes last year, as per official data.
The company had already entered into a partnership with state-run IndianOil Corporation to set up a small-scale LNG plant near Hatta gas field in the Vindhyan basin of Madhya Pradesh.
Currently, ONGC has about 80 discoveries that are yet to be monetised. It is planning to ready three to four Field Development Plans for its stranded gas discoveries by the end of the current fiscal year.
“The decline in gas production is only momentary. We have a number of discoveries which are underway in terms of field development plans and we are also trying to bring in technology improvement, the techno commercial aspect of it,” said the source.
In the second quarter of the current fiscal, ONGC produced 4.912 billion cubic metres of gas, as against against 5.018 BCM in the same period of last fiscal.
The decline in growth of gas output, which was 3.6% in Q1FY25 over Q1FY24 has been brought down to 2.1% in Q2FY25 over Q2FY24.
The company expects its acreage acquisition to grow to 2.6 lakh square kilometer, against 1.5 lakh square kilometer in 2023. It is targeting an indigenous production of 40 million metric tonnes of oil equivalent (MMtoe) in the current fiscal.
Earlier, in an analyst call, the company had said that it plans to increase its cumulative production of crude oil and natural gas by 20% to 47 MMtoe comprising about 21.8 MMT of crude oil and about 25.5 BCM of gas from the current 39.45 MMtoe over the next three years.
The company opened the three oil wells of A-field of deepwater block KG-DWN-98/2 in October which aided in enhancing its total oil production to about 25,000 barrels of oil per day. It now plans to open the remaining five oil wells shortly.