The Asian Age

ONGC blames DGH

Says re­fusal to clear JV de­layed gas out­put from KG


New Delhi, Sept. 1: As the oil min­istry looks into rea­sons for de­lay in ONGC’s KG basin gas de­vel­op­ment, the sta­te­owned firm says it lost three years be­cause the min­istry and DGH re­fused to ap­prove its part­ner­ship with Norway’s Sta­toil and Petro­bras of Brazil for the block.

Oil and Nat­u­ral Gas Corp ( ONGC) had in 2007 farmed out 15 per cent stake in the KGDWN- 98/ 2 block, which sits next to Re­liance In­dus­tries’ KG- D6 block, to Brazil’s state- con­trolled oil firm Petroleo Brasileiro SA or Petro­bras. Another 10 per cent in­ter­est was given to Norway’s Norsk Hy­dro ( now Sta­toil Hy­dro).

The two firm, who are among the big­gest deep sea de­vel­op­ers in the world, were to bring in tech­nol­ogy and ex­per­tise to de­vel­op­ment of gas dis­cov­er­ies in KGDWN- 98/ 2 or KG- D5 block of ONGC.

How­ever, the min­istry and its tech­ni­cal arm, direc­torate gen­eral of hy­dro­car­bons ( DGH) did not ap­prove the eq­uity par­tic­i­pa­tion of the for­eign com­pa­nies, lead­ing to in­or­di­nate de­lays in clear­ing of drilling pro­gramme, ONGC sources said.

Frus­trated at de­lays, the two firms fi­nally walked out of the block in 2010. KG- D5 block was orig­i­nally planned to start pro­duc­ing gas from 2014 with a peak of about 20- 25 mscm/ day. Now, the block will not pro­duce be­fore 2018.

After the pull­out of Petro­bras, Sta­toil and, the oil and nat­u­ral gas cor­po­ra­tion ( ONGC), which does not have the tech­nol­ogy to pro­duce gas from deep sea in ge­o­log­i­cally hos­tile the Kr­ishna Goda- vari basin, they tried to rope in other for­eign en­ergy ma­jors but its at­tempts were fu­tile as it could not get ap­provals, sources said.

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