ONGC tries to farm-out Deendayal - again!
Two years after its last failed attempt, ONGC is again trying to line up a technical and equity partner to develop the challenging eastern offshore Deendayal West (DDW) field.
This month (June 2024), ONGC invited EoIs "from global oil and gas companies with technical expertise and financial strength to join as a partner (take a stake) to firm up a viable strategy" to develop and put on production the HP/HT field. Anyone interested must respond by September 12 (2024).
ONGC carried out a similar fruitless exercise in April 2022, five years after it reluctantly paid more than $1bn in March 2017 to rescue heavily indebted operator GSPC and take 80% as operator at NELP-I block KG-OSN-2001/3, which holds DDW. In its latest notice, ONGC reproduced information from its April 2022 notice inviting EoIs, such as that the field comprises "blocks DDW, DDE, DDN, DD-DT and DD-BRU."
Block DDW has a 37.5-sq km PML area where GPSC drilled seven development wells. ONGC adds that GSPC completed four wells, which "did not yield good productivity as anticipated and performance was sub-optimal."
In the other three wells, GSPC faced severe technical challenges and complications during drilling and completion and had to abandon them. Among the challenges were high temperature (303-400 degrees Fahrenheit), high pressure (10,000-12,000-psi), low porosity (4%-16%), and low permeability (average 0.5-millidarcies).
In addition, the wells deviated at an angle of 35-degrees ('S' profile). ONGC believes "multi-stage hydro-fracturing" might effectively monetise the 55bn cubic metres of in-place reserves because the reservoir "has many thin beds over a large gross interval" and low permeability.
GSPC's failure to attract partners and ONGC's second EoI notice in two years for DDW is a sign "that this field is not commercially developable." Some say ONGC should have advertised for a technical service provider instead who would receive a share of the revenues from production, as it is offering at Mumbai High.
"Two DDW farm-out attempts have failed so far," we hear. "Why repeat it?" In a repeat of the 2022 notice, ONGC wants to "initially drill and complete at least one new well and put it on production for one year."
ONGC acknowledges that a comprehensive development plan is yet to be firmed up based on production data and a well performance assessment.