Oil and Natural Gas Corporation Limited (ONGC) is investing more than INR500 billion ($10 billion) to develop new oil and gas fields and boost production from existing fields, Press Trust of India reported. Out of the allotted amount, above INR160 billion will be invested to enhance production from seven fields and above INR140 billion will used in 14 improved oil recovery/enhanced oil recovery schemes (during 2000 to 2009) to raise recovery factor from 28% to 33%.
These investments will facilitate ONGC to overcome the decrease in production that has set in mature fields like Mumbai High.
ONGC is investing over INR150 billion in the second phase of redevelopment of its prime Mumbai High fields in the western offshore. It is investing INR80.61 billion in Mumbai High South by April 2011 for an incremental 20.7 million tonnes of oil and 3.32 billion cubic meters (bcm) of gas by 2029-30.
Additionally, ONGC is investing INR68.55 billion in Mumbai High North by September 2012 for an additional 17.35 million tonnes of oil and 2.98 bcm of gas by 2029-30.
ONGC investing INR12.63 billion by 2011 in G-1 and GS-15 fields to increase gas production by 2.62 million cubic meters per day.
Besides, INR31.95 billion in development of C-Series fields off the Mumbai coast would give 15.14 bcm of gas in 15 years.
Other investments comprise of INR23.05 billion in Heera and South Heera redevelopment, INR23.23 billion in B-22 cluster fields, INR14.36 billion in B-46 cluster fields and INR32.48 billion in B-193 cluster fields off the west coast.
ONGC has charted out three strategic pursuits comprising of intensifying exploration, improving recovery factor from existing fields and aggressively pursuing for overseas projects.
As part of intensified exploration that aims to create new oil and gas assets, ONGC accreted 284.81 million tonnes of oil equivalent of in place hydrocarbons reserves in fiscal 2008-09.
“Ultimate reserve accretion of 68.90 million tonnes of oil equivalent from domestic operated fields is again the highest in 18 years,” ONGC’s Chairman, R S Sharma said.
ONGC Videsh Ltd (OVL), the overseas arm of ONGC, will aggressively take up overseas exploration and production projects, he said.
“During 2008-09, OVL acquired seven E&P projects in five countries, two being producing properties,” Sharma said. “As a result, the ultimate reserves accretion of 135.08 million tonnes during the year has been the highest-ever.”
“However, we must realise that this spare capacity cushion is bound to erode once the economies recover which seems to be happening faster than expected,” he said. “We apprehend this may again bring uncertainty and volatility in the markets.”
The economic downturn has however not impacted ONGC’s investment plans as reflected in highest ever capital expenditure of INR218 billion in 2008-09, he said adding 94% of this was in the core activity of exploration and production.
OVL invested INR161 billion. ONGC is investing INR2.2 billion in IOR scheme at Rudrasagar fields, INR8.34 billion in Geleki and INR4.3 billion in IOR scheme at Lakwa-Lakhmani.