ONGC lowers crude output target

24 February 2009

The state-run Oil & Natural Gas Corp (ONGC), India's biggest oil producer, yesterday announced that it was lowering its crude oil output target by around 3.5 per cent for the current financial year to end-March, citing infrastructure shortages and technical issues. However, the state run oil major expects production to rise next year as several new fields come on stream.

In its annual plan document for 2009-10, the company said crude oil production during 2008-09 was now expected to be 26.085 million metric tonnes against the earlier estimate of 27.054 MMT, thanks mainly to a 0.611 MMT shortfall from its offshore assets and a 0.358 MMT shortfall from its onshore fields, mainly in Gujarat.

''(The) main reasons for the shortfall...are non-availability of production infrastructure like floating production, storage and offloading vessel required for interim processing of crude, less number of development wells due to non-availability of rigs and the delay in integrated development of...fields in the east coast,'' ONGC said in the document.

But the company, in which the government owns a 74.16-per cent stake, has marginally increased its production target for 2009-10 by 0.865 MMT, anticipating crude oil production from its Bassein and satellite, Neelam & Heera, Assam, Ahmedabad and Mehsana fields.

The company said it expected to produce 22,248 million metric standard cubic metres of natural gas in 2009-10, slightly down from a revised estimate of 22,287 MMSCM in 2008-09 but higher than its original estimate of 21,668 MMSCM for the year.

The company has also projected an increase in its initial in-place hydrocarbon reserves or the total amount of oil and gas found and the ultimate or economically recoverable reserves. It set a target of 285 million metric tonne oil equivalent (MMToe) for initial in-place hydrocarbon reserve for 2009-10, up around 2.5 per cent on the revised estimate of 277 MMToe for the current fiscal year and around 13 per cent higher compared with its original estimate of 251.3 MMToe.