Business Daily from THE HINDU group of publications
Tuesday, Apr 10, 2007
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Business Daily from THE HINDU group of publications Tuesday, Apr 10, 2007 ePaper |
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Petroleum Corporate - Outlook
Richa Mishra
Take on testing The company may undertake conventional testing for one of the appraisal wells in the block, subject to availability of rigs.
New Delhi April 9 Shortage of exploratory rigs seems to be stopping Oil and Natural Gas Corporation (ONGC) from exploiting the block in the Krishna-Godavari (KG) Basin off the Andhra Pradesh coast, where the state-owned exploration major has struck its biggest gas discovery. A senior ONGC official told Business Line that the company had no immediate plans to re-enter the block as there was non-availability of rigs. The gas find in ultra deepwater well in KG Basin became controversial when the Directorate-General of Hydrocarbons (DGH) discounted it on grounds that ONGC had not followed the conventional method of testing to establish the find and abandoned the well. Subsequently, while accepting the discovery, the DGH had said that if ONGC makes a re-entry in the well located in KG-DW-98/2 block and carries out the required tests, discovery or potential commercial viability could be accepted. ONGC holds 90 per cent interest in the KG block, with rest being held by Cairn. While stating that the company does not plan to re-enter the ultra deepwater well (UD1) where it has found hydrocarbon, the official said that the company may undertake conventional testing for one of the appraisal wells in the block, as the feature of the area is very large. This would be subject to availability of rigs, he added. The company's rigs are already deployed in other blocks. The re-entry into UD1 was not being considered since the company has already completed all exploratory activities and has reached the target depth of the well before capping it, he said. In UD1, the estimated probable in place hydrocarbon is in the range of 2.09-14.76 trillion cubic feet (TCF) or 60-400 BCM. The non-availability of rigs could impact the oil and gas hunt of the exploration companies. The ultra-deepwater rigs, also known as floaters, can drill in water depths of over 1,000 metres. There is an acute shortage of such rigs worldwide, and apart from spiralling of charter rates most of the rigs are overbooked. The recent major find in KG-DWN-98/2 block is at a water depth of 2,800 metres, posing a major challenge to the company. As on March 1, ONGC is operating 25 offshore drilling rigs, of which it owns nine. In addition, 70 ONGC owned drilling rigs are also deployed in onshore areas, leaving no idle rig to spare. The current hiring charges of a deepwater rig is $250,000-$300,000 per day and the onshore rig would cost $25,000-$40,000 per day.
Related Stories: More Stories on : Petroleum | Outlook | Oil & Natural Gas Corporation Ltd
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