New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) said on Monday it has restarted oil production from its much-delayed major deepwater project in the Krishna Godavari basin in the Bay of Bengal, helping reverse years of decline in output. ‘First oil’ from deepwater KG-DWN-98/2 block Bay of Bengal The leak occurred on January 7, the company said in a statement.
oil minister Hardeep Singh Puri They also announced the start of production in a post on Twitter but neither they nor ONGC disclosed the quantity of oil to be produced.
“This 98/2 project is expected to increase ONGC’s total oil and gas production by 11 per cent and 15 per cent respectively,” ONGC said in the statement.
ONGC produced 18.4 million tonnes of crude oil and about 20 billion cubic meters per day of gas in the financial year 2022-23 (April 2022 to March 2023).
Puri said the Cluster-2 discoveries in the block “are expected to result in production of 45,000 barrels per day and more than 10 million standard cubic meters of gas per day”. However he did not give a timeframe for reaching those production levels.
Last month, in a written reply to a question in the Rajya Sabha, Minister of State for Petroleum and Natural Gas Rameshwar Teli had said that ONGC will start commercial production of crude oil from the block in May 2024.
The KG-DWN-98/2 or KG-D5 block, located next to Reliance Industries’ KG-D6 block in the KG basin, has had several discoveries that have been linked to clusters.
Located 35 km off the coast of Andhra Pradesh in a water depth of 300-3,200 metres, the discoveries in the block have been divided into Cluster-1, 2 and 3. Cluster 2 is being put into production first.
As per the original plan, oil production from Cluster-2 was supposed to start by November 2021, but it was delayed due to the Covid pandemic. Subsequently, ONGC first set the Cluster-2 oil production deadline as May 2023, but then extended it to August 2023 and increased the first oil flow every month thereafter, with the final deadline being declared as December 2023.
“Bravely overcoming various technical and Covid related challenges, ONGC had successfully executed Phase 1 of the project in March 2020, producing gas from U field of KG-DWN-98/2 block in a record time of 10 months. Production had commenced. With this first oil start on January 7, 2024, ONGC is nearing the completion of Phase 2, which will result in the commencement of oil production from the ‘M’ field of KG-DWN-98/2, ” ONGC said.
It said development of the field faced unique technical challenges due to the waxy nature of the crude oil.
“To overcome them, ONGC employed innovative pipe to pipe technology, which is the first initiative of its kind in India. While some of the sub-sea hardware involved in this development is designed internationally to meet the specific requirements Sourced, most of the construction work was carried out at the modular fabrication facility in Kattupalli, highlighting ONGC’s commitment to promote ‘Make in India’, contributing to a self-reliant energy sector in India.”
It said the project is on track for the final phase of the project and plans to bring the block’s remaining oil and gas fields on production by mid-2024. “Maximum production from the field is expected to be 45,000 barrels of oil per day (bopd) and more than 10 mmsmd of gas.”
ONGC has hired the floating vessel Armada Sterling-V, which is 70 per cent owned by SPOG (Shapoorji Pallonji Oil and Gas) and 30 per cent by Malaysia’s Bumi Armada, to produce oil from the subsea.
The FPSO (floating production, storage and offloading vessel), Armada Sterling-V, was waiting to receive oil from January 2, 2023, after being commissioned on December 27, 2022.
In the KG-D5 block, Cluster-1 contains three discoveries. In 2019, FDP (Field Development Plan) of 2 discoveries was approved. This project is currently in the development phase.
In Cluster-3, there is an ultra-deep water gas discovery which when monetized will be the second deepest hydrocarbon discovery in the world. The FDP is scheduled to be submitted by January 2026.
ONGC had proposed the FDP for Cluster-2 in April 2018, with an estimated capital expenditure of US$5.07 billion and operating expenditure of US$5.12 billion over a field life of 16 years.
The Cluster-2 field is divided into two blocks called 2A and 2B, which were expected to produce 23.52 million metric tonnes of oil and 50.70 billion cubic meters (bcm) of gas over the lifetime of the field as per the original investment decision.
Cluster 2A is estimated to have reserves of 94.26 million tonnes of crude oil and 21.75 bcm of associated gas, while Cluster 2B is estimated to have gas reserves of 51.98 bcm.
Cluster 2A was estimated to produce 77,305 barrels of oil per day (bopd) and associated gas at a rate of 3.81 million metric standard cubic meters per day (mmscmd) over 15 years.
Cluster 2B was expected to produce 12.75 mmscmd of free gas from eight wells and has a life of 16 years.
But ONGC is now estimating lower production – 45,000 bpd oil and 2.5 mmscmd from Cluster 2A and about 9 mmscmd from Cluster 2B.
oil minister Hardeep Singh Puri They also announced the start of production in a post on Twitter but neither they nor ONGC disclosed the quantity of oil to be produced.
“This 98/2 project is expected to increase ONGC’s total oil and gas production by 11 per cent and 15 per cent respectively,” ONGC said in the statement.
ONGC produced 18.4 million tonnes of crude oil and about 20 billion cubic meters per day of gas in the financial year 2022-23 (April 2022 to March 2023).
Puri said the Cluster-2 discoveries in the block “are expected to result in production of 45,000 barrels per day and more than 10 million standard cubic meters of gas per day”. However he did not give a timeframe for reaching those production levels.
Last month, in a written reply to a question in the Rajya Sabha, Minister of State for Petroleum and Natural Gas Rameshwar Teli had said that ONGC will start commercial production of crude oil from the block in May 2024.
The KG-DWN-98/2 or KG-D5 block, located next to Reliance Industries’ KG-D6 block in the KG basin, has had several discoveries that have been linked to clusters.
Located 35 km off the coast of Andhra Pradesh in a water depth of 300-3,200 metres, the discoveries in the block have been divided into Cluster-1, 2 and 3. Cluster 2 is being put into production first.
As per the original plan, oil production from Cluster-2 was supposed to start by November 2021, but it was delayed due to the Covid pandemic. Subsequently, ONGC first set the Cluster-2 oil production deadline as May 2023, but then extended it to August 2023 and increased the first oil flow every month thereafter, with the final deadline being declared as December 2023.
“Bravely overcoming various technical and Covid related challenges, ONGC had successfully executed Phase 1 of the project in March 2020, producing gas from U field of KG-DWN-98/2 block in a record time of 10 months. Production had commenced. With this first oil start on January 7, 2024, ONGC is nearing the completion of Phase 2, which will result in the commencement of oil production from the ‘M’ field of KG-DWN-98/2, ” ONGC said.
It said development of the field faced unique technical challenges due to the waxy nature of the crude oil.
“To overcome them, ONGC employed innovative pipe to pipe technology, which is the first initiative of its kind in India. While some of the sub-sea hardware involved in this development is designed internationally to meet the specific requirements Sourced, most of the construction work was carried out at the modular fabrication facility in Kattupalli, highlighting ONGC’s commitment to promote ‘Make in India’, contributing to a self-reliant energy sector in India.”
It said the project is on track for the final phase of the project and plans to bring the block’s remaining oil and gas fields on production by mid-2024. “Maximum production from the field is expected to be 45,000 barrels of oil per day (bopd) and more than 10 mmsmd of gas.”
ONGC has hired the floating vessel Armada Sterling-V, which is 70 per cent owned by SPOG (Shapoorji Pallonji Oil and Gas) and 30 per cent by Malaysia’s Bumi Armada, to produce oil from the subsea.
The FPSO (floating production, storage and offloading vessel), Armada Sterling-V, was waiting to receive oil from January 2, 2023, after being commissioned on December 27, 2022.
In the KG-D5 block, Cluster-1 contains three discoveries. In 2019, FDP (Field Development Plan) of 2 discoveries was approved. This project is currently in the development phase.
In Cluster-3, there is an ultra-deep water gas discovery which when monetized will be the second deepest hydrocarbon discovery in the world. The FDP is scheduled to be submitted by January 2026.
ONGC had proposed the FDP for Cluster-2 in April 2018, with an estimated capital expenditure of US$5.07 billion and operating expenditure of US$5.12 billion over a field life of 16 years.
The Cluster-2 field is divided into two blocks called 2A and 2B, which were expected to produce 23.52 million metric tonnes of oil and 50.70 billion cubic meters (bcm) of gas over the lifetime of the field as per the original investment decision.
Cluster 2A is estimated to have reserves of 94.26 million tonnes of crude oil and 21.75 bcm of associated gas, while Cluster 2B is estimated to have gas reserves of 51.98 bcm.
Cluster 2A was estimated to produce 77,305 barrels of oil per day (bopd) and associated gas at a rate of 3.81 million metric standard cubic meters per day (mmscmd) over 15 years.
Cluster 2B was expected to produce 12.75 mmscmd of free gas from eight wells and has a life of 16 years.
But ONGC is now estimating lower production – 45,000 bpd oil and 2.5 mmscmd from Cluster 2A and about 9 mmscmd from Cluster 2B.
