MASSIVE INVESTMENT FOR BOMBAY HIGH
Accountants at ONGC reckon the total cost of rehabilitating the ailing Bombay High oilfield could be in excess of Rs5,000 cr ($1.2bn).
IN Chatterjee, Director Finance, ONGC, admits to this report that the figure is much higher than originally expected and, more worryingly, is equal to the corporations annual CAPEX (capital expenditure) budget for the whole country, not just the Bombay Offshore. "We are computing the costs of the exercise but initial estimates indicate it will not be less than Rs 5,000 cr ($1.2bn)", Chatterjee admits.
He adds that after considering several recommendations, ONGC is coming close to deciding a course of action for the Bombay High, where production todays stands at 230,000 barrels a day (b/d), down from past highs of 260-280,000 b/d. Chatterjee said much of the investment will be made on "alterations" in old rigs at Bombay High and by drilling more horizontal and multilateral wells.
He rejects claims that ONGC has been over-zealous in producing from the Bombay High, resulting in damage to the reservoir, a conclusion made by two reports that studied declining production. On the contrary, he insists that "studies" indicate that the Bombay High's reserves have been managed well by ONGC.
The finance director reckons that with better technology and well management, production at the Bombay High could increase by at least 10% this year. Chatterjee tells this report remaining recoverable reserves in the field today stand at around 500m tonnes (3.5bn barrels) - enough to produce at current levels of production will for the next 20 years.
Chatterjee admits that India will have to find a major oilfield like the Bombay High within the next five to ten years. "If that does not happen, we will be in trouble", he said.