ONGC set to re-issue tender for Vasai East oilfield

Vol 8, PW 25 (23 Mar 05) Exploration & Production

ONGC is set to re-issue a tender for its much-delayed Vasai East oilfield development offshore Mumbai near the Bassein gasfield.

The most important change will be the project cost. In April 2003, ONGC set the project cost at Rs985cr ($210m) but this eventually proved to be hopelessly out of touch with reality.

A new development plan will be submitted shortly, reveals ONGC. No details are available about the new cost.

ONGC originally hoped to begin production from April 2006 but Project Management Consultant Engineers India said the project would cost $357m. Worley later estimated the project cost at $433m.

Confusion was compounded when the lowest bidder in ONGCs global tender quoted $468m. Exasperated, ONGC abandoned the tender and hired Gaffney Cline & Associates to prepare an integrated development plan.

ONGC aims to produce 6.2m tonnes of oil and 3.2bn cubic metres gas from Vasai East over 15 years. Vasai East lies next to the giant Bassein field, Indias largest producing offshore gasfield.

ONGC is on schedule to produce oil from Bassein, which along with marginal field B-55 now produces 31m cm/d about 49% of ONGCs gas production. Since June 2004 Bassein has been producing 180 b/d oil of 57-degrees API from one well.

Plans are to drill three more wells in 2005-06 in a pilot project to produce crude from a thin oil rim below the gasfield. Estimates suggest that the rim holds about 100m tonnes in-place oil.

ONGC believes the recovery factor is a maximum 15%. Producing oil from such a geological formation is fraught with major challenges.

First you have a very thick gas cap. Then youll have to contend with the rising of water, ONGC tells us.

There are no readymade solutions.