Comments
Unfriendly reservoir conditions and stiff Russian regulations are the main reasons for ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, falling short of its crude oil production target in Tomsk region, its Russian asset.
OVL had acquired the asset through its acquisition of Imperial Energy Corporation Plc, operating in the region. The company had come in for criticism for this shortfall in production from the Comptroller and Auditor General (CAG) recently.
The overseas investment arm of ONGC expects to close the current fiscal with a production figure of 9.3 million tonnes through its various assets.
From Imperial fields, the company fell short of estimated production of 35,000 barrels of oil per day (bopd) for 2009. According to projections, the production was to go up to 80,000 bopd by 2011. The current output from the Imperial fields is about 17,000 bopd. According to CAG, this un-realistic estimation of reserves/production rate in Imperial has resulted in a loss of Rs 1,182.14 crore during 2008-09 to 2009-10. OVL is spending close to $200 million annually on drilling wells and doing related studies in Imperial. “The area has 17 fields of which five are under production currently. Of this five – 90 per cent production – is coming from two fields. For remaining 12 fields more appraisals need to be done, which the company is currently undertaking,” a senior OVL official said.
Speaking to Business Line , the official said, “the fields have two major reservoirs. One of the packages (area of the reservoir) is very tight. However, today with newer technology in place we would be able to extract hydrocarbons from these difficult terrains also.”
“A drilling technique similar to exploration of shale gas (horizontal drilling and fracturing) is required, which the company plans to use in the area,” the official said.
Further, Russian law does not permit technical data such as seismic information outside the region. “A seismic study of the area is most important to undertake exploratory activity in new areas. In case of Imperial, OVL is using the expertise of technical institutes in Russia,” the official said adding that “once the studies are carried out we would be able to improve production.”
The official also pointed out that compared with fields in West Asia, the production from fields in Russia is much lower.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.