ONGC plans $1.73bn spend for Gujarat revamp

Vol 14, PW 12 (02 Dec 10) Exploration & Production

Money, money, money is what oilfield service providers in India could soon be singing soon! PETROWATCH learns ONGC plans to spend up to Rs8000cr ($1.73bn) over the next four years to ‘revamp’, ‘upgrade’ and ‘refurbish’ its ageing Gujarat oil and gasfields.

ONGC’s Project Advisory Committee cleared the Gujarat asset revamp proposal on November 24 and ONGC’s board then cleared it two days later. Under the revamp, ONGC will replace old pipelines and valves, revamp ‘heater-treaters’, set up new effluent treatment facilities, and drill many new wells at its Mehsana, Ahmedabad and Ankleshwar ‘assets’.

Of the Rs8000cr, we hear, Rs3800cr ($826.2m) will be spent on Mehsana; Rs2200cr ($478.3m) will be spent on Ahmedabad; and Rs2000cr ($434.8m) on Ankleshwar. ONGC has divided the project into three sections: ‘revamp due to technical requirements’; ‘revamp to meet statutory requirements on pollution and emission controls’; and ‘revamp to arrest, maintain and reverse declining production’.

“We have prepared a ‘production profile’ till 2024-25,” explains ONGC. “This revamp is to meet the targets of that profile and is long overdue.

It was conceived more than three years ago when (late) Subir Raha was chairman.” Currently, he adds, Mehsana produces 2.25m t/y (43,000 b/d) of oil while Ahmedabad produces 1.65m t/y (32,000 b/d) of oil and 1m cm/d of gas, while Ankleshwar produces 1.65m t/y (32,000 b/d) of oil and about 4.5m cm/d of gas.

But these fields have ‘matured’ so production is declining at up to 12% a year while ‘water-cut’ has increased to nearly 65%. ONGC finds it hard to dispose of this water, which must be treated to meet stringent ‘pollution control’ standards.

“Many of our pipelines are also leaking,” adds ONGC, “forcing us to troubleshoot almost every day.” The revamp will seek to solve these problems.

It will also try to ensure that Mehsana, Ahmedabad and Ankleshwar crude contains no more than 0.2% of ‘bottom sediment and water’ so it can be supplied to IndianOil’s Gujarat refinery.