The Hindu Business Line : Bengal offshore: Extension delay puts ONGC in a fix

Kolkata March 31 There seems to be no end to ONGC's woes in Bengal offshore. While the Union Petroleum and Natural Gas Ministry is considering the company's plea for fresh extension to complete the minimum work programme, informed sources told Business Line that further delay in taking a call on the issue might lead to a situation whereby the extension, even if granted, may not be of much use.

The problems are expected mainly on two counts — lack of weather window between May and October, and the scheduled expiry of the charter contract with Transocean Nordic, the rig, in December.

Describing the drilling conditions in the block as one of the most challenging in India, an ONGC official said that it took the company two years to locate a suitable rig for the purpose.

Challenges

"Considering the high chartering costs ($74,000 a day) we cannot keep the rig idle. It is now in K-G basin. In case, permission is not available by next month, we may have to deploy on the Western offshore, which will make it practically impossible to deploy the rig in Bengal offshore before October, at the fag end of the chartering contract," the official said.

ONGC has drilled one out of the four scheduled exploratory wells in Bengal offshore (WB-OSN-2000/1) in 2005. The block is held jointly with IndianOil.

The Directorate General of Hydrocarbons (DGH) has clarified that ONGC was granted 18 months' extension to complete the work programme in the block and is not eligible for fresh extension as per the existing policy framework.

However, in a submission before the Petroleum Ministry in January this year, ONGC argued that the last 12-month extension was communicated to it almost at the end of the extended time period. The argument was forwarded in the face of a recommendation for relinquishment of the block. When contacted, the Union Petroleum and Natural Gas Minister, Mr Murli Deora, declined to comment.

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Bengal offshore: Extension delay puts ONGC in a fix