Oil and Natural Gas Corp (ONGC)has put a second well in its promising KG basin block into production, its chairman Subhash Kumar said Friday.

ONGC had achieved first gas from the $5 billion KG-DWN-98/2 or KG-D5 project in the Krishna Godavari basin in the Bay of Bengal in June last year.

Augmenting production from the project thereafter got hit by supply disruption world over caused by the Covid pandemic.

"We have started gas production from second deep-water U1B well in KG-DWN-98/2 Block's Cluster-II on August 31, 2021," Kumar told shareholders at the company's annual general meeting (AGM).

Considered to be the largest subsea project in India, block 98/2 is expected to have a total peak gas production rate of around 16 million metric standard cubic meters per day, with peak oil production rate estimated to be 80,000 barrels per day.

The block sits next to the KG-D6 block of Reliance Industries Ltd and its partner BP Plc of UK.

A total of 34 wells are planned to be drilled as part of the KG-DWN-98/2 project including 15 oil-producing wells and eight gas-producing wells.

Kumar did not say when the project will hit peak production.

The block holds the promise of reversing ONGC's falling oil and gas production. ONGC has seen a decline in output as it operates aging and mature fields.

Kumar said backed by an intensive exploration programme, accretion of in-place reserves has been 92.37 million tonnes of oil equivalent during the 2020-21 fiscal.

"We established commercial oil in Bengal basin, which was dedicated to the nation as the 8th producing basin of India," he said. "10 discoveries were made and we monetized 12 discoveries." ONGC drilled 480 wells were drilled during the year, 100 of these were exploratory wells while the rest 380 were development and side-tracked wells.

The firm produced 22.5 million tonnes of crude oil in 2020-21 fiscal and 22.816 billion cubic meters of gas.

"During the financial year 2020-21, three major projects (1 development & 2 infrastructure) with an investment of around ₹3,333 crore were completed," he said. "Looking forward, over the next few years, the domestic production is expected to be driven by strong output from our Krishna Godavari deep-water field in the eastern offshore as well as Heera in the shallow waters of Western offshore." During 2020-21, the redevelopment of the Nandasan field in Mehsana, Gujarat was approved at a cost of ₹445 crore. Also, the redevelopment project of the Linch field in the same asset has been approved.

"With this, 16 major projects are presently under implementation with a total project cost of around ₹61,133 crore and with envisaged oil and gas gain in excess of 100 million tonnes of oil and oil equivalent gas," he said.

ONGC Energy Centre has taken up the first geothermal energy pilot project in Ladakh wherein it has been planned to drill Geo-Thermal wells and establish a 1-megawatt power plant at Puga, Ladakh.