ONGC, India’s largest producer of natural gas and crude oil is all set to increase its gas production, with Livemint stating that the Maharatna organisation is looking to invest $11 billion towards it. The public sector undertaking (PSU) has a production capacity of approximately 23 billion cubic metres (bcm) per year, with the new target expected to be around 29-40 bcm.
Sources expect this increase in production to happen over the next four years.
ONGC aims to achieve this target by adding blocks from the Krishna Godavari (KG) basin and the R-Series and Ratna oilfields (Mumbai) into production over the next two years. While the R-Series and Ratna oilfields have gas reserves of approximately 1.2 bcm, the gas reserves at KG basin are estimated to be around 280 bcm.
|Project||Investment (since April 2014)|
|Daman Development Project||Rs.60,860 million|
|Nagayalanka (KG-ONN-2003/1)||Rs.49,450 million|
|Coal Bed Methane (Jharkhand)||Rs.6,590 million|
|Neelam redevelopment||Rs.28,190 million|
ONGC will aim to begin production in Daman’s offshore fields from 2018, while Jharkhand’s coal bed methane blocks will be in use from 2020.
A major portion of the investment would be in exploring new locations for resources.
With the government looking at reducing its natural gas imports by 10 per cent, ONGC will have to ramp up production to compensate for this reduction.
While local production is set to increase, ONGC failed to renew its operating licence in Sudan. The organisation generated around 8,000 barrels of oil in the 2B block there.
ONGC has a market cap of approximately $30.3 billion (as of August 2016), having invested over $10 billion in development projects since 2014. It is the second most valuable PSU firm in the country, second only to SBI.