ONGC to invest Rs 7,327 cr; May take control of HPCL to create oil giant

MAHARATNA PSU Oil and Natural Gas Corporation (ONGC) will invest Rs 7,327 crore in developing four oil and gas projects, including the Ratna field which it had got back from Essar Oil. The Board of ONGC approved an investment of Rs 4,104.63 crore in development of R-Series fields including revival of R-12 (Ratna), the PSU said in a statement. Ratna field was discovered in 1979 and put on production in 1983 which continued till 1994. The Government awarded the contract for...
development of Ratna and R-Series fields in 1996 to a consortium led by Essar Oil. However, the contract could not be signed due to various issues and in March last year the Government reverted the Ratna & R-Series fields to ONGC for development and production.
Out of 37 structures in the Ratna-R Series field, which is located about 130-km off Mumbai, 8 structures were found to be oil bearing and only one R-12 (Ratna) field was under exploitation during the period 1982 to 1994. The remaining R- series structures are yet to be monetized.
ONGC said first oil is expected by 2018-19 but the peak out of 14,583 barrels per day is expected to be achieved in 2019-20. The field will produce a cumulative of 8.39 million tons of oil and 1.696 billion cubic meters of gas during the project life.
ONGC Board also approved redevelopment of Santhal field in Gujarat at a cost of Rs 1,162.56 crore.
In a related significant development, media report said that ONGC may take control of Hindustan Petroleum Corp (HPCL) as part of the government’s plan to create an integrated public sector oil entity comparable with big global oil companies like Shell BP and Exxon. The move will stop short of a complete merger, which may take longer, but the purpose will be served with this step, said the people cited above. ONGC’s exploration functions will be integrated with HPCL’s refining and distribution capabilities. HPCL, which owns and operates two major refineries in Mumbai and Visakhapatnam, has India's largest lubricants unit and second largest pipeline network of 3,015 km apart from a vast marketing system.
The field located in Mehsana Asset in North Gujarat was discovered in 1971 and put on production in 1974. ONGC will use enhanced oil recovery (EOR) techniques to double recovery rate from current 17 per cent. After the project, cumulative oil production from the field is expected to be 20.46 million tons by 2029-30. The company will invest another Rs 546.15 crore in development of B-147 field in western offshore. "The field, discovered in March 1991, is a marginal field which would have been otherwise uneconomical to develop on a standalone basis. However, after creation of infrastructure in the nearby fields, there is an opportunity to develop this field by utilising existing surface facilities in an optimised cost environment," the statement said.
The field will produce 0.489 million tons of oil and 0.708 billion cubic meters of gas during the project life with peak oil and gas production estimated at about 1,576 barrels of oil per day and 0.25 million standard cubic meters per day of gas.
The project is scheduled for completion by November 2019.
Another Rs 511.30 crore will be spent in development BSE-11 block in western offshore to produce 1,000 barrels of oil per day, 1,808 barrels of condensate a day and peak gas production of 0.34 mmscmd.
ONGC said another Rs 1,002.67 crore would be investment in 4th Phase Development of NBP field in western offshore to produce 2.08 million tons of more oil.