ONGC reports east coast deep-water oil and gas find

State-controlled Oil and Natural gas Corporation (ONGC) on Tuesday announced a key oil and gas discovery in the Cluster-2 region of the KG-DWN-98/2 block in the gas-rich Krishna Godavari basin.

The KG-DWN-98/2 block that sits next to Reliance Industries' flagging KG-D6 block in the Bay of Bengal. "This discovery (in KG-DWN-98/2) has improved the prospectivity," it said. 
ONGC had earlier notified three discoveries (two pools and one prospect) since June this year, taking the total discoveries to six in FY 2020-21 so far. 
The exploratory well Kavitam-5 (KTAC) KG Onland / Kavitam Additional PML block was found to have gas flowing at the rate of 4,98,560 m3/day. This discovery opened up the area for further hydrocarbon exploration in the south of Kavitam field.
The exploratory well Sundulbari-16 (SDAP) located in AAFB, West Tripura PML found gas flowing at 1,56,378 m3/day. This discovery has established the perceived model of relict sand/channel cut as a play with larger potential in Tripura.
Another exploratory well KGD982NA-PDM-SH-1 drilled in Cluster-2 (KG-DWN-98/2) NELP PML Block, KG Offshore flowed oil at the rate of 3,496 bbl/day and gas at the rate of 61,926 m3/day. This discovery towards east of M-3 discovery improved the prospectivity of Godavari Clay formation for further exploration.
ONGC said it is investing over $5 billion in bringing to production the first set of oil and gas finds in the block.
ONGC started test production of 240,000 m³/d in February from the KG basin and started supplies to state-controlled gas distributor Gail. It plans to drill more wells and start commercial production later this year.
ONGC originally targeted 3mn m³/d from the KG basin by next March, peaking at 16mn m³/d in 3-4 years, with peak oil output of 80,000 b/d. But a six-month lockdown to combat Covid-19 since 25 March has to led to an uncertain schedule for future output, company officials said. India's gas production in the April-June quarter fell by 14pc from a year earlier to 5.54bn m³.
Current oil production at 5.7mmt (down 4 per cent YoY and 3 per cent QoQ) and sales at 5.2mmt were 1 per cent/4 per cent below global agency Nomura's estimates, respectively. Gas production at 5.6 BCM and sales at 4.2 BCM were, however, in line with their estimates. Value-added product sales at 0.66mmt declined a sharp 29 per cent YoY.
The company reported standalone profit of Rs496 crore for the quarter ended June 2020, against a loss of Rs 3,098.3 crore in the previous quarter.
However, stand-alone net profit for the April-June 2020-21 quarter is a whopping 91.7 per cent slump compared to the net profit in the previous year quarter as oil prices halved and gas rates fell to a decade low. 
The surprise profit came after the company delayed payment of cess on crude oil it produces. Initially, the company did not pay even royalty in anticipation of relief from the government to deal with a slump in oil prices.
It cleared royalty payments at June-end but cess payments were done only in July. ONGC pays about Rs 400 crore of royalty and cess every quarter to the government. 
Revenues dipped 51 per cent to Rs 13,011 crore after a nationwide coronavirus lockdown impacted fuel demand.
ONGC said it got $28.72 for every barrel of crude oil it sold in the quarter, down from $66.32 a barrel in the same period a year back.
Gas price realisation fell 35.2 per cent to $2.39 per million British thermal unit.
Consolidated net profit at Rs 1,090 crore was 84.7 per cent lower than Rs7,120 crore a year back.
The company's crude oil production was flat at 4.8 million tonne while gas output fell 12.3 per cent to 5.4 billion cubic meters. The gas output was lower due to reduced offtake by industries shut down during the lockdown.