Oil and Natural Gas Corporation (ONGC) has announced an Rs 34,012 crore investment to bring into production the Krishna-Godavari basin oil and gas field by 2020.
“The investment will be made over four years to bring Cluster 2A and 2B into production. At its peak in 2023, the field will contribute 3.5 million tonnes (mt) of oil, around 15 per cent of the total oil production envisaged by then. Also, gas production at its peak will be five billion cubic metres, or 25 per cent of total output,” said, D K Sarraf, Chairman of ONGC after a board meeting.
The company’s upcoming KG-DWN-98/2 block, popularly known as KG-D5, is divided into three vertical clusters. The top cluster, Cluster 1, is embroiled in a controversy with ONGC accusing migration of gas from the field to the adjoining fields of Reliance Industries.
“We have not taken any investment decision for Cluster 1 where we apprehend gas migration,” Sarraf said. This decision covers the field development plan for two areas, 2A and 2B, in Cluster 2. The areas will produce 23.5 mt of oil and 50.7 billion cubic metres of gas over the life of the field.
Sarraf said the company was comfortably placed to fund the capital expenditure through internal resources. “But a decision will be taken at the appropriate time. It may involve tapping the market for loans,” he added.
Cluster 2A has in-place reserves of 94.26 mt of crude oil and 21.7 billion cubic metres of gas while Cluster 2B has in-place reserves of 51.9 billion cubic metres of gas. Peak production from Cluster 2A is estimated at 77,305 barrel per day and 3.81 million standard cubic meters of gas per day through 15 producer wells. Peak production from Cluster 2B is estimated at 12.75 million standard cubic metres of gas per day from eight wells.