ONGC to invest over Rs 21,500 crore to develop India's deepest gas discovery by 2022-23

State-owned oil major ONGC will invest over Rs 21,500 crore to develop India's deepest gas discovery by 2022-23, helping it more than double output from its prime KG basin block.

Oil and Natural Gas Corp (ONGC), which had last year firmed up an investment of Rs 34,012 crore (USD 5.076.37 billion) in bringing to production 10 oil and gas discoveries in its Bay of Bengal block KG-DWN-98/2 (KG-D5), plans to invest another Rs 21,528.10 crore (USD 3.2 billion) in developing the ultra-deepsea UD-1 find.

"We have submitted to the Directorate General of Hydrocarbons a declaration of commerciality (DoC) for the UD-1 find. We will submit a final investment plan, called the field development plan, by end-2017 and hope to bring the discovery to production by 2022-23," ONGC Director (Offshore) Tapas Kumar Sengupta told PTI.

ONGC plans to drill nine wells on the discovery that lies in water depths of 2,400-3,200 metres and will produce a peak output of 19 million standard cubic metres per day.

The company had previously decided to develop other discoveries in KG-D5 block and leave the UD-1 find in the same block for a later date as it thought there was no technology available to produce gas from such water depths.

Sengupta said that there are consultants who have showed to ONGC that discoveries deeper than UD-1 have been put to production in recent times, particularly in Gulf of Mexico.

"A recent expression of interest (EoI) meeting we had for developing the KG finds saw several consultants offering solutions for such water depths," he said.

ONGC is in the process of appointing a consultant who will assist in developing the UD-1 discovery. The 7,294.6 sq km deepsea KG-D5 block, which sits next to Reliance Industries' flagging KG-D6 fields, has been broadly categorised into Northern Discovery Area (NDA - 3,800.6 sq km) and Southern Discovery Area (SDA - 3,494 sq km).

The NDA has 11 oil and gas discoveries while SDA has the nation's only ultra-deepsea gas find of UD-1. These finds have been clubbed into three groups - Cluster-1, Cluster-II and Cluster-III.

Last year, the company finalised a USD 5.07 billion plan for developing the Cluster-II finds by 2019-20. First gas production is envisaged by June 2019 and oil would start flowing from March 2020, he said.

From Cluster-II, a peak oil output of 77,305 barrels per day is envisaged within two years of start of production. Gas output is slated to peak to 16.56 million standard cubic metres per day by end-2021.

Sengupta also said that Culster-1 field will be developed at an additional investment of Rs 4,259.59 crore and will produce about 3 mmscmd of gas.        

Cluster-2A mainly comprises oil finds of A2, P1, M3, M1 and G-2-2 in NDA which can produce 77,305 bpd (3.86 million tonnes per annum) and 3.81 mmscmd of gas.

Cluster 2B, which is made up of four gas finds -- R1, U3, U1, and A1 in NDA -- envisages a peak output of 12.75 mmscmd of gas.        Peak output is likely to last seven years, he said.