Upstream petroleum regulator Directorate General of Hydrocarbons (DGH) has asked state-run explorer ONGC to review the commerciality of its ultra deep-sea find UD-1 in the Bay of Bengal’s KG-DWN-98/2 (KG-D5) block.
Upstream petroleum regulator Directorate General of Hydrocarbons (DGH) has asked state-run explorer ONGC to review the commerciality of its ultra deep-sea find UD-1 in the Bay of Bengal’s KG-DWN-98/2 (KG-D5) block. According to the declaration of commerciality (DoC) submitted by ONGC to the regulator earlier, UD-1 holds some 75 billion cubic metres of in-place reserves. A DGH official, requesting not to be named, said ONGC itself wanted to add some data to the DOC. “We, as part of our due diligence, have asked it (ONGC) to explain the technology it will use for ultra deep-sea production,” said the official, adding that the regulator was willing to approve the DoC upon re-submission by ONGC with the requisite information. The DGH might also ask for the front-end engineering design for the project, the official added.
An ONGC executive told FE: “The DGH has asked us to review the plan and we are in the process of doing it.” ONGC plans to drill nine wells on the discovery that lies in water depths of 2,400-3,200 metres and could produce a peak output of 19 million standard cubic metres per day. Worldwide, discoveries deeper than UD-1 have been put to production, especially in the Gulf of Mexico. The state-run oil explorer will spend Rs 21,528 crore to develop the UD-1 discovery by 2022-23. Production from this block will help double the output from the KG block for ONGC which plans to increase its gas production in FY18 to 25 billion cubic metres.
PTI quoted an ONGC company official saying as operator the company is confident of technology being available to develop the discovery and that peak output from the block is likely to last seven years. ONGC will be soon appointing a consultant to assist in developing the UD-1 discovery. The 7,294.6 sq km deep-sea KG-D5 block sits next to Reliance Industries’ flagging KG-D6 fields, and has been broadly categorised into Northern Discovery Area (NDA — 3,800.6 sq km) and Southern Discovery Area (SDA — 3,494 sq km).
The NDA has 11 oil and gas discoveries while SDA has the nation’s only ultra-deep-sea gas find of UD-1. These finds have been clubbed into three groups: Cluster-1, Cluster-II and Cluster-III The company last year finalised a Rs 34,012 crore plan to develop the Cluster-II finds by 2019-20. First gas production is envisaged by June 2019 and oil would start flowing from March 2020, PTI reported.
From Cluster-II, a peak oil output of 77,305 barrels per day is envisaged within two years of start of production. Gas output is slated to peak to 16.56 million standard cubic metres per day by end-2021.