Govt wants ONGC & OIL to revive old, closed wells

By: |
New Delhi | Updated: November 20, 2014 5:18:25 AM

Option of auctioning group of sick wells also examined

The government has asked PSU explorers ONGC and Oil India (OIL) to examine the possibility of ‘using modern technology’ to revive old or closed wells in the matured fields. Also being considered is whether a  group of sick wells could be bid out to smaller operators that are in a position to extract value through focussed operation.

A comprehensive action plan for revival of such wells is being prepared by upstream regulator Directorate General of Hydrocarbons (DGH) along with ONGC and OIL. The centre is hoping that it could help in ramping up domestic hydrocarbon output and reduce the ballooning oil import bill.

ONGC has hired Schlumberger for the job and have identified 30 such wells to run a pilot project, while OIL has engaged France’s FOROIL to test 22 shut wells, sources told FE. The pilot project would bring to limelight how many sick or shut wells could be revived and at what cost.

The efforts to ramp up domestic hydrocarbon output is being continuously monitored by Cabinet Secretariat. The nodal ministry is being directed to make a time bound plan and the first set of results of the pilot projects are expected in November.

graph-ongc

Most of the major fields of ONGC and OIL are old and mature, which has resulted in an increased rate of wells falling sick. Though, this is a normal phenomenon in field management, but inventory of non-flowing wells is about 15% of these explorers. These fields are often associated with the problems of declining reservoir pressure, change of fluid characteristics, resulting in wells becoming sick due to poor influx, sand incursion and choking of production tubing, among others.

“While both ONGC and OIL have an action plan for liquidation of sick wells, application of new technology for revival of sick wells is still conservative and requires a boost. There is need for identification of a technology partner to induct the right technology and prepare a clear road map for addressing the problem,” said the source quoted earlier.

An option being explored is whether a group of such sick wells could be bid out to smaller operators who could be in a position to extract value through focused operation. In such cases, ONGC and OIL would need to provide access to such operators to their pipelines for evacuation of oil and gas. However, government would have to offer lucrative fiscal regime to make such bids attractive.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition