Hurry up and connect GSPC block to ONGC fields
ONGC would be well advised to quickly endorse a proposal to connect its undeveloped Yanam and Cluster 1 fields at KG-DWN-98/2 to offshore production facilities at the Deen Dayal West field.
Failing this, the $995.26m it has sunk into acquiring GSPC's stake at KG-OSN-2001/3 will go to waste. "The longer ONGC waits before it begins utilising GSPC's production facilities the more money it will lose," explains a source.
"Think of the interest $995m could be making if it was in a bank account? Waiting too long will push up interest costs of the Deen Dayal acquisition, making it unattractive." GSPC has set up wellhead platforms, an offshore gas receiving and processing platform with living quarters and onshore facilities. Even a pipeline has been laid to shore but commercial production has yet to begin.
ONGC understandably wants to use these under-utilised facilities to develop the HP/HT Yanam field which sits in water depths of around 25 metres only 30 miles from Deen Dayal infrastructure. ONGC has so far drilled eight mainly gas-show wells at Yanam to around 3700 metres but tests were inconclusive and the wells could not be completed because of 'downhole' complications triggered by HP/HT conditions.
"YS#8 was the last well we drilled at Yanam," says an ONGC source. "This was two years ago using Aban-II."
