Oil and Natural Gas Corporation (ONGC) is investing R3,513 crore to infuse life into its South Bassein gas field which was discovered way back in 1976 and has been the mainstay of the companys gas production for decades. ONGC has decided to undertake the redevelopment programme for Bassein after the company discovered gas in the southern part of the field,said a senior ONGC official.
The new finds have come at a good time for the company as this will enable ONGC to avoid an expected decline in gas production from the field. With this the company expects to maintain or slightly increase the current production levels of 25 million standard cubic meters per day (mscmd),the official said. ONGC will use the investments for building a new platform,drilling new wells,subsea systems etc. The additional gas will come on stream in the next 2-3 years time after the wells are drilled, the official added.
The Bassein field which is located off the Mumbai coast currently produces 45% of the companys gas output. In other words out of the 55 mscmd of gas the company currently produces,Bassein contributes around 25 mscmd. The ONGC official said that the new capital expenditure will ensure that the life of the field,which has been producing gas since 1988,will now be extended to 2030.
This is contrast to RILs KG-D6 field gas production which has declined quite considerably in recent times to around 14 mscmd from about 64 mscmd achieved three years ago.
ONGCs Bassein field has so far produced about 220 billion cubic metres (bcm) of natural gas. The new finds will help the company produce about 12-14 bcm of additional gas. The new capital expenditure will ensure that the life of the field,which has been producing gas since 1988,will now be extended to 2030.
The ONGC official said that over the years the Bassein field has continued to sustain production thanks to strong reservoir management practices. According to initial estimates made by the company the Bassein field was to achieve only a peak gas production rate of only 20 mscmd,but has touched up to 29 mscmd in the past.
The gas from Bassein is sold under the administered pricing mechanism (APM) price of $4.2/mmBtu. Thus ONGC is expected to benefit from the Cabinet Committee on Economic Affairs (CCEA) decision to accept the Rangarajan Committee recommendations to increase the APM gas price to $8.4/mmBtu from April 1,2014.
The revised prices will also benefit help ONGC in several other fields as it is the largest produce of APM gas. The expected benefits include its investments in deepwater gas discoveries turning viable,thus leading to higher investments in offshore gas discoveries and higher gas production in future.
In FY13,ONGC produced 51.5 BCM of natural gas down from 52.43 BCM in the previous year.
A majority of the companys gas production comes from the Mumbai offshore fields including Bassein,C-series and PMT.