The Hindu Business Line : ONGC lines up Rs 7,750 cr to revamp onshore assets

While the board has already approved a Rs 2,350-crore investment for revamping installations in Assam, the company is now preparing a Rs 5,400-crore plan for assets in Gujarat.

Pratim Ranjan Bose

Kolkata, Oct. 28 ONGC has lined up Rs 7,750-crore investment to revamp the age-old installations and pipelines of its onshore assets, which produce over 8 million tonnes of oil and oil equivalent a year. According to sources, the project is expected to leave a positive impact on the company’s bottomline by substantially reducing operational and maintenance costs.

While the ONGC board has already approved a Rs 2,350 crore investment for revamping installations in Assam, the company is now preparing a Rs 5,400-crore proposal for revamping installations and pipelines at its assets in Mehsana, Ankleswar and Ahmedabad in Gujarat. These three assets contribute roughly 60-65 per cent of ONGC’s total onshore production.

The proposal (for the Gujarat assets) is expected to be placed before the board in December-January and will include a plan for approximately Rs 4,400 crore for revamping installations and Rs 1,000 crore for rejuvenating pipelines.

“Our assets in Assam and Gujarat are in operation for over three decades, leading to very heavy maintenance cost of Rs 300-400 crore a year. Considering that ONGC has already adopted projects for increasing the recovery rate of all four assets, we have decided in favour of a complete overhaul of the equipment,” a company source said.

Apart from a drastic reduction in maintenance cost, the project will increase the company’s control over production, and reduce surface bottleneck, leading to more assured supply and better data management.

The company has already received a detailed report from project consultant Saipem India. “We are expecting to float the tender for revamp of installations in Assam in November. The project details for Gujarat assets are now being scrutinised. We are hopeful of board approval in this regard by December-January,” the source said.

On the onshore assets in Tripura and Tamil Nadu (Karaikal) and Andhra Pradesh (Rajamundhry), the source said these assets were relatively new and out of the purview of the present project.

ONGC has produced 8.06 million tonnes of oil and oil equivalent in 2006-07 against the target of 8.6 million tonnes. In 2007-08 the company has a target of 8.78 million tonnes production from onshore assets.

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