The hydrocarbon exploration project at Neduvasal in Pudukkottai district and Karaikal is part of the Union government’s attempt to tap small fields of reserves, described as Discovered Small Fields (DSF), to enhance the country’s oil and gas production and reduce its dependence on imports.
On February 15, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved the award of contracts for exploration of 31 contract areas of 44 fields, including 28 on land and 16 offshore, discovered by the ONGC across the country.
The project at Neduvasal DSF, recommended for award to a private company, Gem Laboratories Pvt Ltd., seeks to extract both oil and natural gas from hydrocarbon sediments in an area of about 10 sq. km.
Although seismic surveys undertaken over the past several years had identified an exploration location at the village, no exploration well has been sunk there so far. However, in 2007, the ONGC sunk six exploration wells at various hamlets around Neduvasal such as Karu Nallandarkollai, Vanakankadu, Kottaikadu and Mullankurichi South and North.
The small fields were discovered long ago, but the discoveries could not be monetised due to various reasons such as isolated locations, small size of reserves and high development costs.
It is estimated that about 40 million metric tonnes of oil and 22 billion cubic meters of gas will be monetised over a period of 15 years from the 31 contract fields.
The two contract areas in Karaikal and Neduvasal, awarded under DSF bidding, have an ‘in-place volume’ of 4,30,000 tonnes of oil and oil equivalent gas, says the Ministry of Petroleum and Natural Gas. According to estimates, these two areas are expected to generate gross revenue of ₹300 crore and royalty of ₹40 crore to the State governments.
Ministry’s stand
Referring to the concerns about the impact of the project, the Ministry contends that extraction of oil and gas from sub-surface is a well-established practice and the drilling and production processes require very limited surface area (generally 120 x 120 square metres) and would not affect agriculture. An Environment Impact Assessment would also be done before drilling.
Oil and gas extraction carried out deep-earth does not affect ground water aquifers, which are located at much shallower levels. Hydrocarbon extraction is being done worldwide and is not seen having any direct impact on water resources in the mining area. Other concerns about adverse environmental impact on nearby areas are misplaced as all such operations require prior environmental clearances, and public hearings are an integral part of the process of obtaining the clearances, the Ministry maintained.
The ONGC also clarified that it had not taken up any activity relating to shale gas or coal-bed methane in Tamil Nadu and had no such plans to do so. The ONGC has been working in the Cauvery delta area for more than 50 years and its operations have not had any adverse impact on agriculture, it said.
