A consortium of Oil and Natural Gas Corporation and an arm of Essar Energy have struck natural gas in the Mumbai High fields, an ageing reservoir in the Arabian Sea.

According to sources close to the development, the consortium of ONGC and Essar Exploration and Production Ltd (Mauritius) has filed details of the discovery with the Directorate General of Hydrocarbons (DGH).

The gas discovery was made in the first exploratory well of the Block MB-OSN-2005/3 in the Mumbai Offshore Basin, which the consortium bid for as part of New Exploration Licensing Policy (NELP) VII.

ONGC has 70 per cent participating interest in the block, while Essar holds the remaining 30 per cent with a production sharing contract with the government of India.

ONGC is the operator of the field, while Essar mapped the target field.

One of the sources quoted earlier said it would be premature to comment on the total resources in this well ahead of the appraisal, but estimates it to be in the 350-500 bcf (billion cubic feet) range.

After the technical engagement with the DGH, the consortium will conduct a final appraisal of the discovery after which the reservoir will be delineated and commercialised. The whole process could take a minimum of 18-24 months, the source quoted above added.

The discovery is significant geologically because it’s the first on the west coast in the Pliocene formation, a shallower shelf at a depth of about a kilometre below sea level.

“This opens a new cheaper petroleum system,” the source said, “as one can develop the discovery quite cost-effectively.

“Developing an offshore well costs $25-50 million, spanning shallow to deep water resources. At 1,000 m, the well cost (here) could be as low as $5 million. It just needs simple assembly-line operations to be made commercial.” The Mumbai High reserves are typically at a depth of 2,000-2,500 m.

An independent energy analyst agreed that if the field does go commercial, the monetisation can be done very quickly.

“The infrastructure is already in place. With the low-cost development and drilling techniques, this can be quickly monetised.”

The Mumbai High fields have been flagging over the past decade, with ONGC undertaking several drilling campaigns here to revive the reservoir.

According to the November 2015 presentation, ONGC has gas reserves of 17.86 billion cubic metres (roughly 631 bcf).

Essar Oil has in-place reserves of five tcf (trillion cubic feet) at its coal-bed methane fields, while the Mauritius company has partnered for reserves in Vietnam and Nigeria.

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