In 2010, India’s state run Oil & Natural Gas Corporation (ONGC) has made significant finds in the Krishna Godavari (KG) basin, which is right next to the KG-D6 block of RIL in the K-G basin, off the east coast. ONGC is aiming to develop the KG basin assets through four different projects. The G-1 and GS-15 integrated development followed by the S-1 and Vasistha deep-water development, exploitation of discoveries in the KG-DWN-98/2 block and Project Manik, involving the oil finds.
The blocks are divided into two discovery areas - the Northern Discovery Area (NDA) consisting of the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in water depths ranging from 594m to 1,283m and the Southern Discovery Area (SDA) consisting of the UD-1 discovery falls in ultra-deepwater with a depth of 2,841m.
KG-DWN-98/2, which has 10 gas discoveries, was awarded under the New Exploration Licensing Policy, which allows ONGC to farm out a participating interest to foreign firms. In 2010, ONGC had asked foreign firms to submit proposals to buy a stake in the block. Cairn India is already a 10 per cent partner in the block.
“Giving away more will result in losing control and, in turn, our decision-making ability. We want an international partner who can get us the technology for deep-sea exploration. Both BG and ENI have it. These players are experts in deep water and know exactly how to go about the routine of the block,” said, one of the board members, ONGC. He added the discoveries in KG-DWN-98/2 and three in adjacent blocks together hold 6.37 trillion cubic feet (tcf) of in-place reserves. RIL’s KG block holds in place reserves of 11.3 tcf.
In February 2011, BP agreed to buy a 30-percent stake in 23 oil and gas blocks owned by Reliance Industries for $7.2 billion, as part of a long-term deal that involves a total investment of $20 billion. Nearly four months after RIL signed a deal with BP for getting BP’s technology for deep-sea exploration.
Block 1G was given to ONGC on nomination basis. It cannot sell stake to any firm and can at best involve a foreign firm as a service contractor. ONGC has partnership with BG India in three blocks in KG offshore, two operated by ONGC and one operated by BG. Petrobras and ENI have also partnership in one block each.
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ONGC has entered into a period of exploration for appraisal after completing the exploration MWP commitments in block KG-DWN-98/2. The company plans to start producing 25-30 mscmpd of gas from the block in 2016-17.
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ONGC to sell 30 percent stake in KG block
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