Following the sustained and steady fall in production from both onshore and offshore fields of oil major ONGC since 2006-07, the Directorate General of Hydrocarbons (DGH) plans to push the company into more production enhancement contracts (PEC).
“If for any field, it cannot increase yield, it should relinquish the acreage (without waiting for too long),” said a government official requesting not to be named. The official added that a large number of fields will be put under PEC and it is being decided which ones should taken up in the first round.
The DGH had been asked by the ministry of petroleum and natural gas to regularly monitor the national oil companies.
Data show ONGC’s production from major onshore fields have fallen from 4.84 million tonnes (MT) in 2006-07 to 2.79 MT by 2015-16, and that for major offshore from 15.43 MT to 11.77 MT during the same period. Interestingly, the production figures have shown a continuous fall.
However, according to the government official, the fields are not declining resource-wise but extraction has been poor.
Production from major fields of Oil India, which only operates onshore fields, has also been falling — from 1.139 MT in 2006-07 to 0.553 MT by 2015-16, although some years witnessed minor correction.
There are various dimensions to PEC. Some could be as simple as bettering some surface facilities such as separators, pipelines and tanks as often these get choked, corroded or starts leaking. Usually improving these surface facilities result in 3-5% improvement in production.
Indian Express on March 7 reported that the petroleum ministry has ordered a detailed review of the board of ONGC and functional heads as project delays are a norm and output has not increased. The DGH and the exploration arm of the ministry will be looking at some of the projects and submit a review.
The government is of the view that ONGC’s productivity is low and, according to the official, the number of wells it drills per annum is not adequate.
Falling production of the national oil companies does not augur well for the country which is striving to achieve energy security and plans to reduce its imports drastically by 2030. To this end, the NDA government has also announced that some of the oil companies will be merged to create integrated companies which will provide end-to-end services and have the financial muscles to compete with international firms such as Shell and BP.
“The DGH is figuring out how production enhancement can happen and there would be a few strategies. It (DGH) has the time series data to work with,” the official added.