ONGC’s VA, S1 deepwater fields ready for production

State-owned Oil and Natural Gas Corp Ltd’s Vashishta and S1, or VA and S1, deepwater gas fields in the Krishna-Godavari offshore basin are ready for commercial production and the company has invited bids from prospective buyers of gas from these fields, a senior company official with direct knowledge of the matter told. ONGC wants to sell 5.45 mscmd gas from the two fields for a period of five years. Vashishta and S1 will be the first fields in India to get a “premium price” for gas under the government’s policy to incentivise production from deepwater, ultra deepwater, high temperature and high pressure fields. In March 2016, the Union Cabinet had given its nod to allow higher price of new gas produced from difficult fields. As per the approved policy, the government sets a ceiling price for gas from such fields and operators have pricing and marketing freedom subject to that price ceiling.

The ceiling price is substantially higher than the domestic natural gas price set by the government. For instance, the price for natural gas produced from regular fields stands at $2.48 per mBtu for Apr-Sep, while the price ceiling for gas from difficult fields is $5.56 per mBtu. The price and price ceiling are both revised biannually. Initial production from the two fields, which have been developed jointly, began around September and is expected to be scaled up to around 5.5 mscmd by July.

https://www.freepressjournal.in/business/ongcs-va-s1-deepwater-fields-ready-for-production/1061518