ONGC looks to put 2 CBM blocks into pro­duc­tion in FY17

Resource Digest - - CONTENTS -

State-owned ONGC will com­mence pro­duc­tion from two coal-bed methane (CBM) blocks — Bokaro and North Karan­pura — by as early as the first half of next fi­nan­cial year. This would ex­pand the ex­plorer’s port­fo­lio, which is now re­stricted to con­ven­tional oil and gas.

Un­der its plan, ONGC would spend Rs 2,000-2,500 crore to mon­e­tise its CBM as­sets and reach an out­put level of 1.58 mil­lion met­ric stan­dard cu­bic me­ter per day (mm­scmd) over the next three years.

The ONGC board is likely to give the go-ahead to its fi­nal field de­vel­op­ment plan for the Bokaro block in its next meet­ing. Postap­proval, it would re­quire two-three months to hire rigs and ser­vices to put on ground. The out­put from the block is likely to hover at 0.5-0.6 mm­scmd ini­tially, while the peak out­put is en­vis­aged at 0.74 mm­scmd, which could be achieved in three years, a se­nior of­fi­cial privy to the project said. ONGC would spent about Rs 1,100 crore to bring the Bokaro block into pro­duc­tion. Nearly, 70-80 wells are to be drilled in three years in the block. Of this, 25-30 wells would be drilled in the first year. The PSU ex­plorer has planned the projects with 14% re­turn on in­vest­ment, which is vi­able at a gas price of $4.6/mil­lion Bri­tish ther­mal units (mBtu). How­ever, the do­mes­tic nat­u­ral gas in the coun­try would be $4.24/mBtu start­ing Oc­to­ber 1.

Talk­ing about the fall in do­mes­tic prices, the of­fi­cial said, “The ex­plo­ration projects are of longer du­ra­tion. As we go ahead, ONGC would im­prove ef­fi­ciency, which would cut down on cost of oper­a­tions. More­over, new tech­nolo­gies have been de­vel­oped that brings down the cost.”

For the North Karan­pura block, ONGC is await­ing gov­ern­ment’s nod to trans­fer 25% stake to Prabha En­ergy. The block was ini­tially held by ONGC (80%) and Coal In­dia (20%). ONGC de­cided to hive off 25% stake to the pri­vate firm, which would be the op­er­a­tor of the block. The block is likely to pro­duce 0.3 mm­scmd of gas. “We are ex­pect­ing the go-ahead from the min­istry in few days. This would also come to pro­duc­tion by next fi­nan­cial year,” the of­fi­cial added.

Mean­while, ONGC is car­ry­ing out ex­plo­ration at an­other CBM block — Jharia, while it has en­coun­tered a dead­lock at Rani­ganj block. The Jharia block would also be put into pro­duc­tion shortly with an out­put of 0.5-0.6 mm­scmd. An air­port has been de­vel­oped in the vicin­ity of Rani­ganj block, pre­vent­ing CBM ex­plo­ration. The firm is con­tem­plat­ing if the block needs to be re­lin­quished.

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