ONGC expects to augment its gas production up to 2 million standard cubic meters per day (MMSCMD) as two of its eastern offshore wells are ready for production. Plans are afoot to drill more wells by 2019. According to Ashok Vama, Executive Director (Asset Manager), Eastern Offshore Asset, “The oil and gas major has chalked out a programme to take up drilling in 40 to 45 wells by 2019.” The eastern offshore wing of the PSU has also sent proposals to hire four more rigs to meet the requirements. The eastern offshore wing of the PSU has also sent proposals to hire four more rigs to meet the requirements. “With these two wells, the total production from the eastern offshore will be about two million cubic meters of gas. These are gas fields. We get very little oil which is negligible. As of now we are getting 6.5 lakh cubic meters of gas and 50 cubic meters of oil from the eastern offshore wells per day,” said Vama.
Gas pricing
As the Rangarajan’s gas pricing formula is expected to come into force from April this year the additional gas production is all set to boost companies topline. Barclays Equity Research had earlier estimated that the prices will be $8.3 per million British thermal unit in 2014-15 against the current rate of $4.2. This will be increased to $9.1 in the following year and then to $9.4 in 2016-17. Varma added that these two wells are located in G1 and S1 fields, which are situated around 28 km from the shore. The company sources said that it has 24 blocks in KG Basin, currently produces 840 tonnes of oil per day and 3.8 MMSCMD of gas from its onshore blocks. The company expects to cross production one MMSCMD after April or May and subsequently the production will go up to two MMSCMD when second well comes up for production in August or September. ONGC currently has ten exploratory drilling wells in the eastern offshore fields, besides three operational wells (two oil producing wells and one deep water oil producing well).
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