ONGC seeks higher price for deep­wa­ter Kg-basin block

Resource Digest - - CONTENT -

Pub­lic sec­tor oil and gas ex­plo­ration and pro­duc­tion com­pany ONGC wants a higher price for nat­u­ral gas from its deep­wa­ter block in the Kr­ishna Go­davari basin. “We have asked the govern­ment to of­fer a higher price for the gas that KG DWN 98/2 can pro­duce. At $4.2 per mil­lion Bri­tish ther­mal unit, de­vel­op­ing the 98/2 block is not vi­able,” said DK Sar­raf, Chair­man and Man­ag­ing Di­rec­tor of ONGC, on the side­lines of the In­dia In­vest­ment Sum­mit 2016.

When asked about what would be a vi­able price, he said, “It de­pends on the cost es­ti­mate. We are still work­ing it out but one thing is sure, at $4.2 per mbtu, the block can­not be de­vel­oped.”

The com­pany had pre­pared a field de­vel­op­ment plan for KG-DWN-98/2, how­ever, the Di­rec­torate Gen­eral of Hy­dro­car­bons had asked for a re­vi­sion to lower the cost es­ti­mate. The work on pre­par­ing fresh cost es­ti­mates is still on but could be ready in the next 10 days, said Sar­raf. He did not com­ment on whether the com­pany has writ­ten to the govern­ment for not re­vis­ing the gas price lower than $4.2 per mbtu from April 1. Mean­while, ONGC ex­pects to re­port strong earn­ings in the third quar­ter of fis­cal 2015-16.

“Our av­er­age re­al­i­sa­tions are sim­i­lar to the av­er­age Brent crude oil price dur­ing the third quar­ter. It would be ei­ther $2-3 per bar­rel higher or lower as com­pared to the av­er­age Brent dur­ing the third quar­ter,” said Sar­raf. Brent crude oil prices av­er­aged at around $44 per bar­rel dur­ing the third quar­ter of 2015-16.

Speak­ing at the In­dia In­vest­ment Sum­mit 2016, KD Tri­pathi, Sec­re­tary, Min­istry for Pe­tro­leum and Nat­u­ral Gas, said that the Cen­tre is work­ing to im­prove the at­trac­tive­ness of the oil and gas sec­tor for in­vestors.

He added that the marginal field pol­icy is an ex­am­ple of the ways in which the Min­istry is work­ing to at­tract in­vestors.

SPEAK­ING AT THE IN­DIA IN­VEST­MENT SUM­MIT 2016, KD TRI­PATHI, SEC­RE­TARY, MIN­ISTRY FOR PE­TRO­LEUM AND NAT­U­RAL GAS, SAID THAT THE CEN­TRE IS

WORK­ING TO IM­PROVE THE AT­TRAC­TIVE­NESS OF THE OIL AND

GAS SEC­TOR FOR IN­VESTORS

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