ONGC for hike in gas price

Calls for breakeven on gas prices, cites higher cost of production

Pitching for a higher remunerative price for natural gas, state- owned Oil and Natural Gas Corp ( ONGC) has said it needs $ 6-$ 7.15 to breakeven on gas it plans to produce from its most prolific KG basin block.

In its submission to the four- member panel of secretaries working out a new gas pricing mechanism, ONGC said in 2013- 14, its cost of gas production, after including return on capital, came to $ 4.43 per million British thermal unit ( mmbtu), higher than the current price of $ 4.2.

For new fields and raising output from the matured and ageing fields, higher capital outlays are required which can be viable only at higher rates.

ONGC corporation of india said it will need a gas price of between $ 5.25-$ 17.80 per mmBtu to break- even on 40.54 billion cubic met- ers of production plan- ned from seven small and marginal fields in the western offshore.

For its prime Krishna Godavari basin KGDWN- 98/ 2 block, which sits next to Reliance Industries’ KG- D6 block, ONGC said the breakeven price needed is $ 5.99 per mmBtu.

For the ultra- deep sea UD- 1 discovery in southern part of the block, the break- even price needed is $ 7.15, it said.