ONGC's G1-GS15 field to commence production in April

Pratim Ranjan Bose Kolkata | Updated on November 10, 2017 Published on February 09, 2011

Costs likely to shoot up, total domestic production next fiscal may not improve

ONGC expects the G1-GS15 offshore field in Bay of Bengal to finally come into production by April-May , according to sources – five years behind schedule, and at a higher cost than estimated.

Located 20 km off the Amalapuram coast in Andhra Pradesh, the field is slated to produce at a peak rate of 2.7 million standard cubic metre of gas and 9,400 barrels of associated oil, a day.

G1 and GS15 are two marginal fields being developed together. Of the two, G1 is a deepwater field, 20 km away from the shore line and GS15 is a shallow water field. Gas was scheduled to start flowing from the integrated field way back in April 2006, at an estimated cost of Rs 1,200 crore.

New-age technology

The project was significant for more than one reason. Firstly, G1 was the first deepwater field to be developed by ONGC. Secondly, the project envisaged intensive use of new age oil production technology, requiring limited human intervention.

Most importantly, the field was slated to produce the first non-APM (administered pricing mechanism) gas for ONGC.

However, the development programme had run into rough weather from the word go, leading up to legal contest with the erstwhile project contractor, Clough Engineering of Australia. The legal complications were finally settled in 2010, paving the way for the development of the field.

While the revised cost estimates of the G1-GS-15 are not known, the former ONGC Chairman, Mr R. S. Sharma, told Business Line in August 2010 that the company decided to complete the project at a much higher cost than originally envisaged. The rate of return will be diluted, he had said.

Last December , the company awarded a Rs 80-crore contract to Leighton India, for completion of offshore installations.

Production outlook

Meanwhile, market sources do not expect an improvement in ONGC's total domestic production in the next fiscal.

Having targeted domestic production of 27 million tonnes of crude oil and 25 billon cubic metre (bcm) of gas - from own fields (nomination blocks) as well as joint ventures - in 2010-11, ONGC had been on target till the end of the third quarter of this fiscal.

Sources expect that the gains in natural gas production from G1-GS15 in 2011-12 will largely compensate the natural decline in the company's largest gas field at Bassein, in Mumbai offshore.

Gas production is expected to receive a boost once the B-series marginal fields start coming into production mode expectedly, in the first half of 2012.

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Published on February 09, 2011
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