Reliance, BG to transfer some assets of PMT JV to ONGC
13 April 2016
A joint venture of ONGC, Reliance Industries and the BG Group will hand drilling infrastructure from an abandoned gas field in western offshore to ONGC Ltd, a development that would help the state-run explorer develop key gas reserve nearby faster than planned.
The development could help speed up development of ONGC's Daman and C-26 cluster projects by three years.
The abandoned mid and south Tapti field in western offshore was awarded by the government in December 1994 under the production sharing contract (PSC) regime, with current participation of ONGC (40 per cent), British Gas (30 per cent) and Reliance Industries (30 per cent).
The PMT JV informed the government of their intention to abandon the Tapti field and associated facilities upon cessation of production. ONGC has sought transfer of part of Tapti facilities (comprising the processing platforms along with the connected export pipelines) for use in its adjacent Daman development and C-26 cluster development projects. Accordingly, the government decided to hand over the identified facilities to ONGC as government nominee in line with the PSC provisions, an ONGC release said.
The JV members, accordingly, signed the Tapti asset transfer agreement on 12 April 2016 with ONGC.
ONGC has committed an investment of over Rs8,600 crore towards Daman development project and C-26 cluster development project to enhance production of natural gas and condensate from its Daman block in the Arabian Sea.
Production from these two projects is expected to start in the second quarter of the current financial year (2016-17), with estimated peak production rate of about 11 MMSCMD of gas and over 11,000 barrels of condensate per day.
The construction of 10 well head platforms, one riser platform, subsea pipelines and other associated facilities are in progress for Daman and C-26 development projects. Drilling rigs have been earmarked for drilling of 36 wells.
Now, with the availability of the Tapti process platform, necessary modification and construction works will be carried out expeditiously and gas production can be started from these projects as per schedule, ONGC stated.
This is the first asset transfer agreement in the E&P sector in India, facilitating transfer of facilities no longer required by an E&P operator to another operator to optimally use it to expedite the field development activities and thereby reduce capex.
ONGC said the signing of the landmark agreement has been possible due to support from the ministry of petroleum and natural gas, Directorate General of Hydrocarbons and cooperation between the PMT JV members.
Executives from Reliance, BG and the state-run oil firm ONGC have been at odds for months over the cost of closing the Tapti field off the country's west coast.
But after government mediation, the three signed a deal on Tuesday that will see the equipment handed over without charge, with Reliance and BG saving on dismantling costs.