ONGC and DGH ceasefire over Mumbai High
ONGC and the DGH have ended their damaging war of words over development of the Mumbai High.
Effective prodding by the oil ministry has resulted in both sides exchanging conciliatory letters and by the time you read this issue oil minister Ram Naik should have officiated at a ceremony on 9th October where ONGC chief Subir Raha and DGH czar Avinash Chandra will have shaken hands to cement the deal. For months the DGH has opposed ONGC's ambitious $1.1bn redevelopment plan of 140 wells for Bombay High South (BHS), originally scheduled to begin in July.
But according to the agreement, ONGC will stick to its plan. "We continue with our 140-well programme," reveals a senior source.
"But we will carry out more geological and geophysical studies." BHS redevelopment should start next month. So, what was the fuss about "Well, DGH wanted to be heard, wanted its point of view to be noted, that's all." Another ONGC source rubbishes DGH concerns that the drillers lobby was behind the BHS redevelopment plan.
"It is stupid to talk of the drillers lobby," he adds. "I need wells if I have to do anything with the oil-bearing strata." One major BHS tender is ready for issue, but we have no further details.
A DGH source lists the following areas where ONGC has agreed to cooperate. More pilot projects within ONGC's overall BHS redevelopment plan.
Compress the time schedules for the pilot projects and then go ahead depending on results Immediately begin drilling in the single layer zones and not in the multi-layer, heterogeneous zones More geological and geophysical studies. Compress the time schedule of these by having more groups working on them locally and also by hiring overseas experts if needed The massive investment proposed should yield incremental oil recovery of between six and eight percent and not just four percent Produce more gas from S1, L1 sands so that wells with high GOR (gas to oil ratio) can be shut down, as part of efforts to maintain reservoir health Adopt amodular approach so that the success of one module leads to another module