Cites delay in communication as reason

Pratim Ranjan Bose
Richa Mishra

Cup of woes

ONGC says

it received the formal communication granting the last extension almost at the expiry of the extended time period.

The company

encountered gas while drilling the first well in 2005, high pressure and other technical problems forced it to cap the well.

Drilling at

shallower depths the company faced strong current and extremely muddy bottom of the sea.

Kolkata/New DelhiJan. 26ONGC has sought fresh extension of time frame from the Petroleum Ministry to complete the minimum work programme in Bengal offshore on the grounds that formal communication for the last extension in 2006 was received late.

While responding to recommendations for relinquishment of the New Exploration Licensing Policy-II block WB-OSN-2000/1, the company has argued that it had received the formal communication granting the last extension almost at the expiry of the extended time period.

A senior company official told

Business Line

, "For all practical purposes, the last extension was granted with retrospective effect. Naturally we could not make much use of it."

The company Chairman, Mr R.S. Sharma, had recently raised the issue with the Ministry and sought fresh extension to complete the remaining part of the work programme.

Deep drilling

Incidentally, ONGC had initially targeted drilling for deeper prospects in the block. Though the company encountered gas while drilling the first well in 2005, high pressure and other technical problems forced it to cap the well.

The company later changed its drilling strategy and targeted prospects at lesser depths. However, shallow water depth (10-12 metres) coupled with strong current and extremely muddy bottom of the sea compounded ONGC's woes, the official said.

The conditions were so unfavourable that the operator of the jack-up rig Transocean Nordic refused to drill at the identified locations, he said, adding that the rig had also met with an accident and remained idle for months before being re-deployed in Mahanadi basin.

Meanwhile, when contacted the Directorate General of Hydrocarbons officials said nothing beyond the extension policy can be considered. As per the provisions of PSC (production sharing contract), an extension of only six months can be granted to the operator for completing the committed work programme. However, an additional 12 months was granted under the new extension policy.

ONGC, which is the operator for the blocks WB-OSN-2000/1, has therefore been granted extension of 18 months in respect of Block WB-OSN-2000/1, the officials said.

Related Stories:
Problems galore for ONGC at Bengal offshore
ONGC's drilling in Bengal Offshore to be delayed

(This article was published in the Business Line print edition dated January 27, 2007)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.