The Hindu Business Line : ONGC to prepare investment blueprint to boost output

ONGC is gearing up to prepare a three-year investment blueprint to enhance production both from its matured fields as well as through development of new fields.

The initiative is expected to enhance production from the matured fields by 10 to 15 per cent. The company will be taking the help of integrated technical and management consultant Gaffney, Cline & Associates (GCA) to prepare the project layout.

The Institute of Reservoir Studies of ONGC is acting as a nodal agency on the company's part to prepare the guidelines.

Key executives of the company will be meeting for a three-day brainstorming session, defined as `Framework 2006-07-08', later this month to set the course of its future investment flow and reverse the projected trend of natural decline in production. The company is carrying out recovery enhancement measures in 40 odd wells arresting decline in production. Brownfield expansion projects were taken up in Mumbai High.

Describing the initiative as the most ambitious project undertaken by the company in recent years, sources said the primary objectives were: Brownfield expansion of the ageing fields by introducing new technology, improving the recovery rates from the existing wells some of which are as old as 30 years, and optimising production from the marginal fields. The aim is to prepare a priority list of investments to enhance production and reserves in a three-year period.

To optimise utilisation of the available resources, the project would focus on streamlining its supply services and logistics, including in-time management of rigs.

"The average cost of hiring rigs has gone up manifold in the last couple of years to $1,00,000 a day in the case of off-shore installations and $40,000 for on-shore. Accordingly, better management of rigs will throw open opportunities for more meaningful investment," an official said.

The project also aims at taking some not so popular decisions such as phasing out of the non-flowing wells mostly on-shore and re-deployment of workforce for productive purposes.

While the investment outlay of the three-year project is not disclosed, sources say that the company's capital expenditure will rise substantially in the years to come.

"From over Rs 10,000 crore in 2004-05, our capex has moved beyond Rs 12,000 crore in 2005-06 and is now set to cross the Rs 14,000-crore mark in the next fiscal. Even at the current trend we are likely to invest close to Rs 20,000 crore in a few years down the line," the official said.

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