Oil and Natural Gas Corp (ONGC) has slashed estimates of peak oil and gas production from its USD 5-billion KG basin project by 35-40% even as it began producing oil from the deep-water field on Sunday.
The output from its KG-DWN-98/2 block will slowly ramp up and is expected to reach a peak of 45,000 barrels of oil per day and over 10 million metric standard cubic meters per day (mmscmd) of natural gas, the company said on Monday, without specifying when the peaks will be reached.
The Monday estimates are much lower than those shared in May 2017, when ONGC expected the KG block output to peak at 78,000 barrels of oil per day and 15.57 mmscmd of gas. Then it had also expected the KG block to begin producing gas from June 2019 and oil from March 2020.
The USD 5-billion project, however, got delayed, with the block beginning its gas production in March 2020 and oil in January 2024.
ONGC completed phase 1 of the project in March 2020, resulting in the beginning of gas production from the ‘U’ field of the KG block, the company said in a statement on Monday. Phase 2 is nearing completion with the starting of oil production from the ‘M’ field. The balance oil and gas fields of the block are scheduled to start producing by mid-2024, ONGC said.
The KG project is likely to increase ONGC’s total oil and gas output by 11% and 15% respectively, the company said.
‘The development of this field faced unique technical challenges due to the waxy nature of the crude. To overcome those, ONGC employed innovative pipe-in-pipe technology, a first-of-its-kind initiative in India,” it said.
State-run ONGC is the country’s largest producer of oil and gas.
