ONGC begins drilling near Chennai

When Narendra Kumar Verma, Director-Exploration of Oil and Natural Gas Corporation, broke a coconut, symbolically, on the rotary table of a rig and pulled a lever on Sunday morning, it was a first of sorts for the national oil company.

The company began drilling its first well in the Palar basin, some 40 km north of Chennai, at a scientifically chosen patch of land in the middle of hundreds of mango trees.

In a couple of months, the ‘drill bit’ — the steel-toothed contrivance that chips off rocks and bores into earth — will hit its target 2 km below the ground. Drilling wells is to an oil company as regular as casting nets to a fisherman, and typically only one in 10 drills yields anything. But the first well in the PR-ONN-2005/1 block that ONGC won in the seventh round of auctions in 2005 seems to be laden with hope. In his speech before the spud, Verma said the Palar basin was situated between two prolific producing regions of Cauvery and Krishna-Godavari.

New finds Opening up new areas and getting hydrocarbons from tough sources such as high pressure, high temperature reservoirs, ultra deep seas and hilly regions is crucial for the ₹165,000-crore public sector oil giant as it cruises towards its target of producing 130 million tonnes of oil and oil-equivalent gas by 2030, from 60 mt today. Against this backdrop, ONGC “looks forward” to the upcoming regime of hydrocarbon exploration — the ‘open acreage’ system. In the last 15 years, oil and gas exploration has been under a system where the government auctions blocks. In the nine rounds of auctions, 302 blocks have been given out for exploration, but only six have begun producing anything even though there have been 128 discoveries. That there have been investments of $15 billion in the last 16 years, most of which are from Reliance and its partners, is seen as a sad commentary of the auction-based method of exploration. ONGC prefers the ‘open acreage. “We know the country’s sedimentary basins better than anybody else,” Verma told Business Line .

He said before the auction system came into vogue, ONGC, then a ‘Commission’ that operated on Government’s budget, had little money to explore.

Then it became a ‘company’ with own financial resources, but had to live with auction of blocks. Now for the first time ONGC will face a combination of enough financial resources and choice of where to drill, Verma said.

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