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Ongc offers stake in the Kg block to foreign companies and aims for financial and technological assistance for production

The state-owned Oil and Natural Gas Corporation (ONGC) is offering foreign companies a stake in its ultra-deepwater gas discovery and high-pressure, high-temperature block in the KG Basin as it seeks a financial and technological assistance to bring difficult fields to production.

ONGC has launched an initial tender seeking interest from global majors with “the required technical expertise and financial strength” to join as partners in the development of the Deen Dayal West (DDW) block as well as discoveries ultra-deep in cluster-III of his KG-Zone D5.

Expressions of Interest (EOIs) were invited by June 16, according to the company’s call for tenders. While ONGC made a discovery of UD-1 gas in Block KG-D5 at a water depth of 2,850 meters (nearly 3 kilometers), the company in August 2017 paid Rs 7,738 crore for the gas. purchase of 80% of the capital of the DDW block of Gujarat. the public company GSPC.

On the one hand, ONGC does not have the technology and expertise required to develop the UD discovery, which is about 150 km from the coast, while on the other hand, it has not had much success in the DDW block which holds high reserves. high pressure and high temperature (HPHT).

The CGSB is seeking technology partners and service providers for the development of both and is willing to offer equity participation to interested companies, the tender document states.

He, however, did not specify how much stake the company will offer. At the time of acquiring GSPC’s stake in 2017, ONGC said the acquisition fit well with its strategy to accelerate natural gas production from domestic fields.

It planned to use GSPC’s field facilities to bring discoveries into production in its neighboring block KG-DWN-98/2 (KG-D5). But the seven wells drilled so far have not yielded much success. The plan to use DDW facilities also did not materialize.

“Four wells that were completed did not yield good productivity as expected and performance was suboptimal. Serious technical challenges and complications were encountered in three other wells and had to be abandoned,” the statement said. call for tenders. GSPC has made 9 gas discoveries in the Bay of Bengal block. Of these, three KG-08, KG-17 and KG-15 commonly referred to as DDW fields had been approved for development.

The CGSB had said it wanted to revise the field development plan after confirming the well engineering and completion strategy for the implementation of new wells. “The purpose of the EoI is to gauge the level of interest of potential partners (E&P companies, service providers and technology players) to join as partners to achieve a revised field development plan,” said he declared.

ONGC holds a 100% interest in block KG-DWN-98/2 or KG-D5 in the Krishna Godavari Basin. The block is next to the KG-D6 area of ​​Reliance Industries. The block, the CGSB said, has three sets of finds – Group I in the northern part, Group II and Group III in the southern part.

ONGC develops oil and gas discoveries in Cluster II on its own. Oil production is expected to start by the end of the year and gas production by May 2023. The seven appraisal wells drilled have confirmed the constant presence of 60 meters of gas sands.

Currently, ONGC is engaged in the preparation of the land development plan. “Given the inherent knowledge, cost and technology challenges associated with the field, ONGC is seeking technical expertise to define a way forward for the future development of the deepwater UD portfolio,” he said.

First post: STI

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