The Hindu Business Line : Studying ONGC appraisal plan for KG field will take time: DGH

Field work
DGH to look into issues like profit petroleum, allocation of development costs.
ONGC plan outlines integrated development of the discoveries.

Richa Mishra

New Delhi, Dec. 17 Oil and Natural Gas Corporation (ONGC) may have to wait for some time before it can exploit oil and gas from its Krishna Godavari Basin fields. Official sources said, “the company has clubbed the development of KG-DWN-98/2 with the discoveries in the adjoining area that ONGC holds as nomination blocks. Since this involves a lot of detailing, the Directorate-General of Hydrocarbons’ (DGH) nod for the appraisal and conceptual development plan for the field will take some time.”

ONGC has submitted to the DGH an appraisal and conceptual development plan for the fields. According to sources, the company has pegged in-place reserves at 6.37 trillion cubic feet (TCF) and also plans to produce oil from the region.

Procedure

After finding hydrocarbons, exploration companies submit an appraisal and development plan to the DGH. Subsequent to the DGH nod, the companies go in for an appraisal programme.

Mr V.K. Sibal, DGH, told Business Line that “the plan needs to be studied in depth as issues involved concern different exploration regimes. While the KG-DWN-98/2 is a New Exploration Licensing Policy (NELP) block, the other discoveries belong to nomination blocks. Both involve different policies.”

“Besides, issues like profit petroleum, allocation of development costs, and potential of each discovery needs to be studied before the plan is given a go-ahead. All these issues take time,” he said.

ONGC’s appraisal plan outlines integrated development of the discoveries in shallow to deepwater of the northern part of the KG-DWN-98/2 block, along with other finds in the adjoining nomination region including G-29, GS-4 and Vashistha. Industry insiders say the hub approach for development of wells in the exploration block within the vicinity of each other is done if the find in isolation is not substantial and together may become commercially more viable.

Indications

Indications are that the company plans to drill five wells in the KG block, including three appraisal and two exploration wells. For its successful UD 1 (ultra deepwater) discovery in the same block, the company plans to give a separate appraisal plan. In December 2006, it had struck gas in UD1 well in its KG block, which is adjacent to Reliance Industries’ prolific KG find.