Indian Air Force bans ONGC from 98/2 drilling

Vol 16, PW 2 (09 Aug 12) Exploration & Production

Any hope ONGC might have of bringing KG-DWN-98/2 onstream fast has been dashed, perhaps fatally.

PETROWATCH learns the former Cairn-operated gas discovery block is the only one of 16 where the Indian defence ministry has unambiguously said it can’t drill. This shattering piece of news was relayed to ONGC by the DGH on July 31.

With 10 reported discoveries, this KG deepwater offshore block enjoys similar star status to the KG-D6 and Deen Dayal blocks in the vicinity. ONGC is impatient to drill six appraisal wells at KG-DWN-98/2 in water depths of 2000 metres using DD KG-1 or Platinum Explorer, each to 4000 metres TD.

But the Indian Air Force objects to exploration here because 90% of the block falls in a missile testing range! “This is a major setback for us,” admits ONGC. This week (August 8) oil secretary Girish Chaturvedi met ONGC, Cairn, BG, Reliance and BHP Billiton, all facing similar problems, with a promise to argue their case with Dr.

Vijay Kumar Saraswat, secretary in the Defence Research & Development Organisation, who he is scheduled to meet on August 13. Split in two, KG-DWN-98/2 has a Northern Discovery Area (NDA) and a Southern Discovery Area (SDA).

In the NDA sits the Annapurna, Kanakadurga, Padmawati, D-1, E-1, A-1, U-1 and W-1 discoveries; in the SDA sits the ultra deep UD-1 discovery (G-4 and G-4-6 discoveries) and the IB (GS-29 discovery). In June the oil ministry extended the seven-year exploration phase in the NDA till December 31 next year and in the SDA till June 7 next year.

ONGC must begin drilling its six appraisal wells before then, or face the prospect of losing the block.