Even as Oil and Natural Gas Corporation (ONGC) is in the process of tying up with strategic partners for collaboration, the Directorate General of Hydrocarbons (DGH) has agreed to extend the ‘exploration period’ of major gas blocks, two each in the KG and Mahanadi basins, to carry out further appraisal.
In the KG-DWN-98/2 in the northern discovery area (NDA) the period has been extended to 2013 and that of KG-DWN-98/2 in south discovery area (SDA) to end of 2012 to carry out appraisal. It has also agreed to extend the exploration period of two Mahanadi blocks for carrying out appraisal in MH-OSN-200/2 to end of 2012 and that of MN-DWN-98/3 to end of 2012.
Officials in the Petroleum and Natural Gas Ministry told The Hindu that the five-and-half month period between date of grant of PEL and effective date is respect of block Kg-DWN-98/2 is recommended to be granted as excusable delay. The timelines in respect of NDA and SDA of the block would get restructured till December 31, 2013 and June 7, 2013.
“The proposal for drilling six additional wells in the NDA and SDA can be submitted by the operator under Articles 5.11, 5.12 of the PSC, which would be reviewed by the managing committee under Article 6, a communication from the DGH has stated.
Similarly, the proposal for drilling five additional wells in block MN-DWN-98/3 and any requirement in MN-OSN-2000/2 in light of the appraisal programme will be pursued consequent to the recent MDW-10 discovery could be submitted by the operator. ONGC has already indicated that it is in the process of tying up with strategic partners for collaboration in such technologically challenging ultra deepwater development projects.
ONGC plans to will start producing natural gas from these blocks in the Bay of Bengal in 2016-17. In-place gas reserves of 3.42 trillion cubic feet have been established in block KG-DWN-98/2 in the KG basin. Of this, 1.904 trillion cubic feet (TCF) is recoverable. Seven of the finds are in the northern part of the block, where Cairn India holds a minority 10 per cent stake. It is estimated that nearly 25-30 million standard cubic metres per day of gas can be produced by 2016.
ONGC has put the investment required for bringing to production the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in the NDA of the block at over $5 billion.