ONGC: HOW NOT TO APPROVE A DEVELOPMENT PROGRAMME

Vol 3, PW 9 (26 May 99) Exploration & Production
     

If ONGC is looking for examples of the cumbersome decision-making process inherent in its organisation, it need look no further then the much-delayed plan to approve a development programme for the North Kadi oilfield in Gujarat.

This report learns that the Comprehensive Development Plan for North Kadi Field was approved by TK Gopalaswamy, Director Exploration, on 19 June 1998 at a meeting with its authors at the Institute of Reservoir Studies (IRS) in Ahmedabad. However, it was only in late February 1999 that the Plan was presented to the Executive Committee of ONGCs board for approval.

Instead of approving the North Kadi Plan, however, the board sent it back to the IRS for more information on existing wells. The North Kadi Plan is yet to make it to another meeting of the board, held on average every three or four weeks.

In itself the North Kadi oilfield is not hugely significant, producing just 1,330 barrels a day (b/d). Delay in implementation, however, means costs will invariably rise.

In the original proposal, ONGC sets capital expenditure for North Kadi at $42m, to spend between now and 2002. Its objectives are:- a) to improve the oil production rate b) to improve the recovery of the field c) to produce the oil trapped below gas traps d) to develop the extended south eastern area In its proposal, ONGC reckons North Kadi - producing since October 1968 - has approximately 406m barrels of in-place reserves.

To increase production it wants to enhance effluent handling capacity to 6000 cubic metres a day, initiate workover jobs in 40 wells and install artificial lifts. A total of 27 development locations have already been approved and 5 assessment locations have been released to confirm the limit of the south east extension.