STEADY PROGRESS

New Delhi, Sept. 20 (PTI): State-owned ONGC’s significant oil discovery in the Bay of Bengal will begin production in 2019, with a peak output of 4.5 million tonnes a year, 20 per cent more than the previous estimates.

The oil discovery in the Krishna-Godavari basin block KG-DWN-98/2, or KG-D5, will be the first large oil production from the east coast. The block also has 10 gas discoveries.

“We are moving fast on KG-D5 development. First gas from the block is planned for 2018 and first oil in 2019,” Oil and Natural Gas Corporation (ONGC) chairman and managing director Dinesh K. Sarraf told reporters here.

While a bulk of its near 25-million-tonne crude oil production comes from western offshore and fields in states such as Gujarat and Assam, KG-D5 will produce up to 90,000 barrels per day (4.5 million tonnes per annum) — the largest from any field on the east coast.

“Conservative estimates put the production at 75,000-plus bpd,” he said.

Another company official put the peak output at 90,000 bpd.

ONGC will produce 17 million standard cubic metres per day of gas from the block, which sits next to Reliance Industries’ producing KG-DWN-98/3 or KG-D6 area.

“We plan to put to production discoveries in the northern part of the block together with finds in a neighbouring block,” he said, adding the company is currently working on a field development plan, which will detail the investment required. KG-D5 is divided into a Northern Discovery Area (NDA) and Southern Discovery Area (SDA).

Investment in NDA may be at least $9 billion, a senior company official said, adding the company’s internal assessment was that gas can start flowing from the block only in 2021-22 but Sarraf wants the development to be fast-tracked so as to begin production by April 2018.

NDA holds an estimated 92.30 million tonnes of oil reserves and 97.568 billion cubic metres of inplace gas reserves spread over seven fields.