OVL to pump $120m more into Myanmar blocks
ONGC Videsh (OVL) is preparing to spend an additional $120m at two offshore Myanmar blocks as operator Daewoo prepares to begin a major drilling programme from December (2019).
An industry source tells us OVL needs to make the additional investments to maintain and boost production at deepwater blocks A1 and A3 to meet the Daewoo-led JV's commitment to maintain 'plateau supplies' of 500m cf/d (14m cm/d) until 2031 to China National United Oil (CNUOC). Any shortfall will incur penalties.
A reserves evaluation and certification exercise carried out in 2017 by RISC Advisory downgraded recoverable gas reserves figures forcing the JV to combine Phase-II and III of the original Field Development Plan prepared in 2009 bringing forward its implementation by four years to 2018-22 instead of 2022-26 as originally planned. Under the new combined Phase-II and III plan the JV will drill eight development wells at A1 and three exploration wells at A3 beginning December 2019.
A new offshore platform will also be installed and connected by a bridge to the existing offshore platform and a low pressure gas compressor, estimated to cost $620m, will be installed in 2024, not 2027 as previously planned, to maintain "daily contracted gas supplies’ to sole customer CNUOC. Production from the eight new development wells is expected to begin sometime between April 2021 and April 2022 to supplement supplies to CNUOC that began in June 2013 under an 18-year contract.
