ONGC targets 2018 output from KG-D5 offshore area

Indian state-controlled upstream firm ONGC plans to start producing natural gas from its Krishna-Godavari (KG) basin area offshore east India by mid-2018 to help the country’s sagging output.

ONGC will start output from the KG-D5 block, after several years of delays, oil minister Dharmendra Pradhan said. The company has previously indicated a start-up date of 2022. Boosting domestic gas output is vital for India, whose low gas prices make imports of LNG and investment in such import infrastructure financially unviable.

The company is using a cluster approach, or developing a group of fields together using common infrastructure, to develop oil and gas finds in KG-D5 that is adjacent to Indian private-sector conglomerate Reliance Industries’ (RIL) already-producing KG-D6 block. KG-D5 is divided into the northern discovery area (NDA) and southern discovery area (SDA). NDA’s estimated reserves are 887mn bl of oil and 78bn m³ of gas in place, with SDA having 80.9bn m³ of in place gas, according to the oil ministry.

RIL and ONGC secured the KG-D5 and KG-D6 blocks respectively in the first round of India’s New Exploration Licensing Policy in 2000. RIL began gas production from KG-D6 in April 2009, reaching peak output of more than 60mn m³/d by 2010. But it now produces less than 13mn m³/d as against a targeted 80mn m³/d, with RIL in arbitration with the government over disallowed costs because of the output decline. ONGC is also fighting RIL in court accusing RIL of extracting gas from its KG-D5 block.

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