ONGC wins 2-year extension at KG discovery block

Vol 17, PW 19 (08 May 14) Exploration & Production

ONGC has won a crucial 24-month extension to its Phase-I exploration period at east coast offshore block KG-OSN-2004/1 - the site of six promising discoveries.

On April 30 the Empowered Committee of Secretaries approved a 12-month extension to 'regularise' or make valid four discoveries after Phase-I officially ended on May 24, 2011. An additional 12 months was granted to allow Phase-I to continue to April 30 next year.

When Phase-I ended three years ago ONGC’s exploration efforts were hindered by defence ministry restrictions and difficult geology. An 18-month extension to January 5, 2013 wasn’t enough to complete the Minimum Work Programme of eight wells so ONGC boldly continued drilling, making four new discoveries.

With luck the new extension will allow ONGC to drill enough additional wells to realise the block’s estimated gas potential of 82bn cubic metres, say officials. “ONGC has already established 16.47bn cubic metres of gas in-place,” we hear.

“When more wells are drilled more reserves will emerge.” ONGC reckons it has discovered and opened up the hitherto untested Mio-Pliocene play at the block with a high success rate.

Are the discoveries commercially viable “None of the discoveries are viable individually,” adds a source. “Even developing the discoveries together is not viable without high gas volumes.

” To make the block viable, believes ONGC, it will need to drill more wells beyond its MWP commitment to add reserves.