Oil and Natural Gas Corporation (ONGC), the crude oil and natural gas Company in India, has recently announced the beginning of oil production from its long-awaited primary deep-sea initiative in the Krishna Godavari basin situated in the Bay of Bengal. It has reversed a prolonged period of declining output, as announced by the company.
Oil and Natural Gas Corporation (ONGC) is a state-owned enterprise in Indian energy sector. ONGC is one of the global leaders in exploring, producing, and refining oil and gas resources. ONGC operates across diverse terrains, from offshore and onshore fields to deep-water exploration. ONGC continually also works in the hydrocarbon industry while contributing significantly to the nation’s energy landscape and socio-economic development.
Oil and Natural Gas Corporation (ONGC) has initiated production from the Cluster-2 project situated within the KG-DWN-98/2 block. According to Oil Minister Hardeep Singh Puri, the commencement of the first oil production marks the initiation of operations in a block that was deemed complex and challenging. The company intends to gradually increase its output from this particular site. Without specifying the immediate yield, he conveyed an anticipated production of 45,000 barrels daily, accompanied by an excess of 10 million standard cubic meters of gas per day. The commencement of Cluster-2 oil production, originally slated for November 2021, faced postponement due to the disruptions caused by the Covid pandemic.
The floating vessel Armada Sterling-V, primarily owned by SPOG (Shapoorji Pallonji Oil & Gas) with a 70% stake and additionally held by Malaysia’s Bumi Armada at 30%, has been contracted by ONGC for the purpose of extracting oil from beneath the seabed. Since its connection on December 27, 2022, the FPSO, known as Armada Sterling-V, has been in a state of anticipation, awaiting the commencement of oil reception which was scheduled to initiate on January 2, 2023. In the journey towards achieving its oil production milestones, ONGC initially marked May 2023 as the deadline for the commencement of oil extraction from Cluster-2. However, this timeline underwent successive extensions, spanning from August 2023, then further pushed to September, subsequently to October, and ultimately culminating in December 2023.
Situated next to Reliance Industries’ KG-D6 block within the KG basin, ONGC’s KG-DWN-98/2 or KG-D5 block occupies a strategic offshore location amidst the Godavari river delta in the Bay of Bengal. This area harbors a series of discoveries, consolidated into clusters, signifying a critical venture in the oil exploration and extraction endeavors within this region. Located 35 kilometers off the coast of Andhra Pradesh, amidst water depths spanning from 300 to 3,200 meters, lies an important discovery site within the block. The findings within this area have been categorized into three distinct clusters: Cluster-1, 2, and 3. Among these, Cluster 2 has taken precedence in the production pipeline. Specifically, the focus lies on Cluster 2’s subdivision into blocks 2A and 2B. Initially, the investment decision anticipated a yield of 23.52 million metric tonnes of oil and 50.70 billion cubic meters (bcm) of gas throughout the field’s operational lifespan.
Within the estimated reserves of Cluster 2A, there lie approximately 94.26 million tonnes of crude oil alongside 21.75 billion cubic meters (bcm) of associated gas. In a separate vein, Cluster 2B is anticipated to harbor reserves comprising 51.98 bcm of gas. The operational projections for Cluster 2A encompass an expected daily production rate of 77,305 barrels of oil and a concurrent extraction of associated gas pegged at 3.81 million metric standard cubic meters per day (mmscmd) over a span of 15 years.
Cluster 2B, initially projected to yield a cumulative free gas output of 12.75 million metric standard cubic meters per day (mmscmd) through eight wells over its anticipated 16-year lifespan, is now facing a revision in its output estimations. The revised estimates indicate a decreased output, with Cluster 2A expected to produce approximately 45,000 barrels per day (bpd) of oil alongside associated gas reaching up to 2.5 mmscmd. Additionally, the expected free gas output from Cluster 2B itself is now forecasted at approximately 9 mmscmd, marking a deviation from the original projection.