ONGC to hike crude oil, gas output

Oil and Natural Gas Corporation Ltd is gearing up to substantially increase its crude oil and gas output through the development of multiple fields, according to top officials, The Hindu reported.

The state-run oil and gas explorer had already received approval for the development of Daman project at an investment of Rs5,219 crore and the re-development Bombay High North project with another investment of Rs5,707crore.

It is also at an advanced stage of finalising the field development plan of KG-DWN-98/2 block, better known as the KG-D5 fields off the east coast of, which holds out promise of substantial reserves of gas and crude oil.

According to DK Sarraf, chairman and managing director, ONGC was quite bullish on the 98/2 block. He added, the block should produce in mid-2018.

He added, in fact, the whole of the executive committee of ONGC went to Kakinada and reviewed the project.

In addition to gas reserves, the field had substantial reserve of crude oil, he added and had a projected output of 70,000-90,000 barrels of oil per day, at a conservative estimate.

However, the past decade had seen oil and gas output decline steadily at the oil explorer's fields.

During FY14, the company's domestic oil and gas production stood at 45.03 mt of oil equivalent (mtoe), the lowest in a decade from the 2005, production level of 47.15 mtoe. ONGC's scrip rose 2.78 per cent at Rs 454.80 on the BSE on the back of drop in crude oil prices and upgradation by Bank of America Merrill Lynch on a possible reworking in subsidy-sharing formula.

The explorer however declined to give details on the reserves the block held and the investment it would entail. According to Sarraf the plans for the field were still at the drawing board would be submitted to the government in December 2014.