ONGC is celebrating the Cabinet decision of getting back its crown jewels — the Ratna and R-series oil and gas fields — which were previously awarded to Essar Oil. Bloomberg TV India caught up with the PSU explorer’s CMD Dinesh Kumar Sarraf.

What’s your first reaction to the Cabinet decision to return Ratna and R-series blocks to ONGC from Essar Oil?

Historically, the Ratna and R-series blocks were discovered by ONGC. We developed it, constructed the platform and started production. And at the time the then government decided that it should be auctioned and given to a consortium of ONGC and a private sector company. But the government, due to its own difficulties, could not implement that decision. And we have been taking up with the government that this should be given back to us so that we can start our work in that block and start production. It is good that the government has finally taken a decision that it will be given back to us. Now our plan is to make a physical inspection of all these facilities because we have not gone to that platform and seen those fields in the last 20 years. We will take our engineers there and see what is the physical situation of those facilities and how much of that can be utilised now.

What is your initial ballpark sense of the reserves?

We do not want to give a number at present. We would prefer to do our homework first and then come out with numbers in terms of production and reserves.

When do you see the results of this start showing in your financials?

We cannot say this because we do not know how much work has to be done before we start seeing the effects on our financials.

So when are you making these plans or when do you think you can do so?

We have already started this work and it will take a couple of months to complete this.

What’s your view on deep water gas price being considered at $6-7 per mmBtu? How do you see that incentivising further investment in these deep-water blocks?

I would say it is a dream decision taken by the government to help the oil and gas producers to step up gas production in the country. I want to say that Thursday was a golden day for the oil and gas industry. What does it mean for ONGC? We have made very significant discoveries in the eastern offshore, more particularly in the KG basin. We have not been able to monetise these discoveries because of the gas price, which we thought was low. We have taken up this matter with the government and I must thank the government that they have reviewed the gas prices.

But will it incentivise the capex and investment into the sector, especially in your company?

Yes, certainly. We are going to make a capital investment decision in less than a month’s time to monetise the KG-DW9 and 10 blocks. And we feel that within three-and-a-half years or so, we would start production. The peak production is going to be about 17 million cubic metre of gas per day and more than 75,000 barrels of oil per day.

When will it start showing in your financials?

When we start the production.

In terms of clientele for high pressure gas, who will be the real takers for this?

For gas, there is big demand even at high prices. So, we do not think demand is going to be a constraint.

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