Finds several ‘improvement areas’ in last week’s review
Petroleum minister Dharmendra Pradhan, who did a detailed review of India’s flagship explorer ONGC on June 6, saw several “improvement areas” and asked the state-run firm to work towards increasing hydrocarbon output and expanding exploration activity.
“ONGC should increase volumes across several areas,” Pradhan told FE in an interview, adding the government was committed to investor-friendly policy decisions. ONGC has set an ambitious target of drilling about 1.74 million tonne (mt) incremental crude oil and 2.98 billion cubic metres (bcm) of additional natural gas in FY16. It produced 22.26 mt crude in FY15, marginally higher from the previous year’s 22.25 mt. Gas output was 22.02 bcm, less than 23.28 bcm in the previous year.
Recently, the minister had also visited ONGC fields in Assam and Mumbai offshore.
“The chunk of production is coming from Western offshore. It is a tough job to take out hydrocarbon from offshore assets, which ONGC has been doing for decades. In future, incremental oil and gas would come from the same region,” Pradhan explained.
Currently, 34.5% of ONGC’s crude production comes from improved and enhanced oil recovery schemes. This means extra efforts are being put in to extract hydrocarbon from ageing fields, which naturally see a decline in output. Another 13.1% hydrocarbon is drilled from new fields.
ONGC had taken up 15 projects, worth Rs 38,602 crore, for monetisation of 39 new and marginal offshore fields. Of this, nine have been completed, which produced 2.74 mt crude (13.8% of ONGC’s production) and 3.35 bcm natural gas (15% of its gas output) in FY15.
ONGC is working on six major field development and three redevelopment projects with an investment of Rs 41,678 crore. Of this, Rs 24,188 crore is towards development projects including Daman, Vasistha & S-1, Bassein, Vasai, Gamij and Nagyalanka. Another Rs 17,490 crore is for three re-development projects — the third phase of Mumbai High North and South and Heera-South.
Dinesh K Sarraf, CMD, ONGC, said efforts were being made to achieve the target for the current fiscal. Meanwhile, if some opportunities come up that could immediately add to incremental production, they would be explored. “The government is supportive, which gives the push and encouragement for ONGC to do more,” Sarraf told FE.
Meanwhile, the petroleum minister has asked ONGC to maintain transparency at all levels. “ONGC should not offer contracts on nomination, but tendering should be carried out,” Pradhan said.