The Hindu Business Line : ONGC fails to complete work programme at Bengal offshore

Kolkata, June 8 Having secured successive extensions, ONGC may finally have to wind up its oil hunt at Bengal offshore block, empty handed and without fulfilling the committed work programme. ONGC has 85 per cent operating stake in the block and IndianOil has 15 per cent participatory stake.

While ONGC officials maintain that they are still committed to complete work programme in the block and have applied to the Petroleum and Natural Gas Ministry for fresh extension under the merger policy of work programmes announced in 2007, sources told Business Line that the company’s plea had so far failed to cut ice with the Ministry.

As things stand today, the PSU exploration and production major may have to pay penalties for failing to live up to the promised work programme and for relinquishing the block (WB-OSN-2000/1).

In September 2007, the company was granted six months extension to complete the minimum work programme by February 2008. The extension came over and above a maximum 18-month extension granted under the NELP.

Rig problems

Though ONGC had taken measures to make the best use of the last extension, the project ran into problems. First, the plan to deploy as many as three rigs failed as two of them developed snags. In fact one of the rigs – DS Matdrill – developed snags midway during the mobilisation and was dry-docked.

Having one rig for drilling in three locations, the company’s first attempt proved dry. Two top priority locations could not be drilled as they were interfering with the shipping channel of Kolkata Port Trust. Having settled for the next location, drilling was called off midway to save the rig from being damaged by the challenging environment of the Sunderbans.

The final attempt to drill a well at a low priority area and complete the promised work programme was also called off midway due to unforeseen pressure and other drilling conditions.

“It was the most challenging block we have ever explored,” a company official said.

Hopes on Contai block

Meanwhile, the gas-starved Bengal may pin its hopes on the pre-NELP Contai onshore block in East Midnapore district where ONGC is slated to resume drilling in August. According to sources, based on the previous drilling results the company will hunt natural gas at prospects located at older sediments deeper under the ground.

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