The Hindu Business Line : ONGC contests decision on KG gas discovery

What ONGC says
Straddle-packer MDT methodology technically acceptable.
Provides sufficient information to establish a discovery and assess its potential commerciality.

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New Delhi, Feb. 22 Oil and Natural Gas Corporation (ONGC) has contested the Directorate General of Hydrocarbons (DGH) decision to disallow the company's recent gas discovery in Krishna Godavari Basin. Adopting an aggressive stand, the state-owned upstream exploration major has written to the Petroleum Ministry as well as the technical regulator, DGH, stating that the discovery could not be disregarded.

Senior ONGC officials told Business Line, "We have responded to the Director General, Mr V.K. Sibal, on Wednesday stating that the discovery has been endorsed by his officials. In fact, his officials had concurred with company's modular dynamic test (MDT) that established in place reserves."

The DGH had disallowed the discovery in block KG-DWN-98/2 UD1 well on the grounds that it had been declared on the basis of straddle packer MDT, a kind of stimulation, which according to the technical regulator was not conventional. Besides, without flowing the gas to the surface, the company had abandoned the ultra deep water well.

Countering this ONGC said that the DGH representative was present on the deep sea drill-ship from December 9 to 15 when the test was done and logs taken from well UD-1 to establish natural gas reserves. As regards conventional method for testing not being followed, the official said, it was not because of any technical complications. The straddle packer MDT is technically acceptable as conclusive testing methodology and provides sufficient information to establish a discovery and assess its potential commerciality.

Besides, it was acceptable to DGH. As per the company's initial assessment it has in-place volume of 2.09 TCF to 6.73 TCF in northern structure and 2.61 TCF to 8.03 TCF in the southern structure identified through the UD-1 well. Arguing further, the company has said in such deep-water depths of 2,841 metres, a conventional test consumes 15 days against eight hours per MDT thus allowing multiplicity of the test in a given zone.

ONGC has also pointed out that DGH had on January 2 accepted UD-1 as a discovery based on straddle-packer MDT and date of conclusion of the test as the date of discovery, December 15. The DGH had asked ONGC to submit notice for potential commercial interest of the discovery within 60 days. However, on February 19 the DGH disallowed the discovery.

On the issue of abandoning the well, ONGC has said, the well UD-1 was abandoned as per the industry's standard practice with a provision for re-entry by placing corrosion cap, so that it is possible to take production at a future date. Besides, according to the company the exploratory drilling was completed and the rig was moved to a new location after the target base was achieved.

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