Business Daily from THE HINDU group of publications
Saturday, Aug 04, 2007
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Business Daily from THE HINDU group of publications Saturday, Aug 04, 2007 ePaper |
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Outlook
Pratim Ranjan Bose Kolkata, Aug 3 The country’s first deepwater oil and gas field development project taken up by ONGC as early as in November 2004 may be headed for an uncertain future. Described as G1-GS15, the oilfield located in the prolific Krishna-Godavari basin was estimated to clock a peak gain of 2.7 million standard cubic metre of natural gas (and associated oil) a day latest by April 2007. During the launch, the Rs 1,200-crore project was described as “a digital oilfield development programme” and was originally scheduled to be completed in April 2006. The date of completion was later revised to April 2007. The project was also slated to give ONGC first access to non-APM gas (often described as new gas). According to sources, as things stand now, ONGC could bring into production only part of the project producing in the range of 0.5 mmscmd. The residual part of the project is headed for serious technical as well as legal complications which will not only have a bearing on the cost but also on the completion of the project. While ONGC has terminated project contracts with Clough Engineering of Australia and confiscated the bank guarantee for alleged delay in completion, Clough has access to some critical equipment without which ONGC cannot resume project work. “We are gearing up for completion of the residual part of the G1-GS15 project. However, we are not in a position to announce a schedule for the same as we have to untangle various legal and technical complications before appointing the new contractor,” an ONGC official said. The matter has turned for the worse as Clough held ONGC responsible for the development and sought legal provisions, which may land the issue in court. According to a press release issued by Clough in June, “ONGC was responsible for drilling five deep water wells which Clough would then connect to the onshore gas plant. Despite repeated attempts, ONGC has failed to complete any of the deep water wells hence Clough has been unable to complete its contract works.” “ONGC currently owes Clough about $80 million which would be substantially reduced by Clough transferring ownership of equipment to ONGC to enable ONGC to complete the works itself,” the release says, adding that the company is interested in a settlement.
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