The MoU between Oil and Natural Gas Commission (ONGC) and international energy major, Shell Exploration Company BV, features broad areas of co-operation.
The sphere of upstream co-operation includes investigation of increasing and enhancing production from existing producing fields in India, joint bidding in NELP and other similar rounds, developing Indian exploration blocks, joint participation in international upstream ventures and evaluation of a joint project for coal gasification facilities in India.
The subject of downstream co-operation includes evaluation of the hydrocarbon supply chain, joint business opportunities in the areas of marine fuels and lubricants as well as refineries and petrochemicals.
Identification and evaluation of joint business opportunities in the field of coal bed methane applications, monetization of currently stranded ONGC hydrocarbon resources, co-operation in the development of renewable energy resources and provisions relating to technology and consultancy services regarding inspection, maintenance, Health, Safety and Environment Management (HSE) and energy efficiency and loss control are some of the other contents of the MoU.
In 2006, Oil and Natural Gas Corporation (ONGC) struck natural gas in ultra-deepwater well UD1 in the Krishna-Godavari block KG-DWN-98/2.
However, this gas discovery in the Krishna-Godavari basin (KG basin) was disallowed by the Directorate General of Hydrocarbons (DGH) as ONGC had abandoned the well. Besides, according to the norms laid down by the product-sharing contract (PSC), if the gas does not flow to the surface, like in this find, it cannot be considered to be a discovery.
ONGC was to contest the DGH views and ask for a third-party audit. According to the company, it was carrying out its activities in the New Exploration Licensing Policy (NELP) blocks in accordance with PSC norms.
In adherence to the norms, in the well UD-1, block KG-DWN-98/2, ONGC notified DGH regarding modular dynamic test (MDT) in the interval 5,243.5 – 5,304 m, which was conducted in the presence of a DGH representative during December 7-15, 2006. The interpreted presence of hydrocarbon was validated through this test.
The company claimed that it had duly informed the DGH of the presence of Non-Associated Natural Gas (NANG) on 23 December 2006. ONGC, in consultation with its partner Cairn Energy India Ltd, submitted its potential commercial interest, meriting appraisal, in the prescribed format to the DGH.
ONGC in KG Basin
Oil and Natural Gas Corporation (ONGC)–operated G1 and GS 15 fields in the KG basin are both predominantly gas fields. GS 15 will start production from April 2010 and G1 from April 2011.
G1 is located 28 kilometers off Amalapuram coast in water depths ranging from 135 to 500 meters, while GS 15, in shallow waters, is located 5 kilometers from the coast in the KG basin.
At their peak, the two fields are expected to cumulatively produce two million standard cubic metres per day (mmscmd) of gas for about 7 years, after which production would decline.
ONGC expects a production of 0.982 million tonnes (MMT) of sweet or low-sulfur crude and 5.92 billion cubic metres (bcm) of gas over a period of 15 years from G1 and GS 15. At present, the fields produce about 400 barrels of oil per day.
ONGC Oil & Gas Discoveries in KG Basin
In March 2005, Oil and Natural Gas Corporation (ONGC) made a significant gas discovery in its “Sagar Samriddhi” Deepwater Exploration campaign at location VA-1A in Block No. KG-OS-DW-IV in the KG basin. The well was completed to target a depth of 2449 meters. The presence of gas was confirmed through log evaluation and wire-line testing.
Cumulatively, ONGC has established about 130 million tons of oil and oil-equivalent gas in-place in KG Offshore.
State-run ONGC had announced that these finds would be brought into production through integrated development with nearby GS-29, G-1 and GS-15 structures.