ONGC plans $5 bil­lion in­vest­ment to de­velop east­ern gas as­set

The Pak Banker - - COMPANIES/BOSS -

MUM­BAI: In­dia's Oil and Nat­u­ral Gas Corp. Ltd said it will un­veil an in­vest­ment of around $5 bil­lion by the end of March to de­velop a ma­jor gas as­set in the east, with a view to tap­ping higher gas prices. The as­set, which the state-owned com­pany ac­quired in 2005 un­der a swap agree­ment with UK's Cairn En­ergy Plc, can pro­duce up to 17 mil­lion met­ric stan­dard cu­bic me­tres per day (mm­scmd) of nat­u­ral gas and 75,000 bar­rels of oil per day by 2020.

The level of out­put will make it ONGC's se­cond big­gest hy­dro­car­bon as­set in In­dia, D.K. Sar­raf, chair­man and man­ag­ing di­rec­tor of the coun­try's big­gest ex­plorer, told re­porters on Satur­day. He in­di­cated that the in­vest­ment could be more than $5 bil­lion.

The an­nounce­ment fol­lows a govern­ment de­ci­sion to al­low pro­duc­ers de­mand a higher price for gas ex­tracted from hy­dro­car­bon basins lo­cated in the deep­wa­ter and ul­tra deep­wa­ter, where costs can be sig­nif­i­cantly higher.

"With the new gas price an­nounced by the govern­ment, our dis­cov­er­ies in the KG (Kr­ishna Go­davari) basin are now vi­able," Sar­raf said, adding that an in­vest­ment plan would be an­nounced by the end of March or by the first week of April at the lat­est. The new in­vest­ment may boost ONGC's nat­u­ral gas out­put by a quar­ter and crude oil pro­duc­tion by al­most 15% over the next 4-5 years, a ma­jor leap for a com­pany of­ten crit­i­cized for fail­ing to ar­rest a pro­duc­tion de­cline from its age­ing fields.

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