ONGC Opens Well In Bay Of Bengal’s Kg Basin To Increase Oil Production

On August 24, 2024, ONGC marked a significant milestone by starting production from its fifth oil well in the KG-DWN-98/2 Cluster-2 asset. According to a stock exchange filing, ONGC has begun transporting and selling associated gas using a floating production, storage, and offloading (FPSO) vessel, emphasising its commitment to zero gas flaring. However, the company did not disclose the new well’s current production levels.

ONGC has also successfully launched its gas export line from the offshore site to the onshore terminal. Earlier in January, oil production began from the same asset, with 4 of the 13 wells already operational. Gas production is also advancing, with 3 of the 7 gas wells online.

This block is situated next to Reliance Industries’ KG-D6 block in the Krishna Godavari basin and consists of multiple discoveries grouped into clusters. These clusters are located 35 kilometres off the Andhra Pradesh coast, at depths ranging from 300 to 3,200 meters, and are divided into Cluster-1, Cluster-2, and Cluster-3. Production started first in Cluster 2.

Oil production from Cluster-2 was initially scheduled to begin by November 2021 but was delayed due to the COVID-19 pandemic. The target was later revised to May 2023, and after several delays, oil began flowing on January 7, 2024. At the time, ONGC anticipated peak production from the field to reach 45,000 barrels of oil per day (bopd) and over 10 million standard cubic meters per day (mmscmd) of gas.

In August, ONGC produced 12,000 bopd and 0.4 mmscmd of gas from 4 wells in the eastern offshore block. Another well was planned to be opened, which is expected to increase oil production and raise gas output to 1.5 mmscmd. ONGC plans to open additional wells in the third quarter of 2024 to reach a production rate of 30,000 bopd by early 2025. The peak output of 45,000 bopd and 6 mmscmd of gas is expected by March 2025. The FPSO vessel, Armada Sterling-V, is being used for oil extraction, having been in place since December 2022.

About ONGC

Established by the Government of India in 1956, ONGC was founded to explore and develop the nation’s oil and gas resources. ONGC is India’s leading crude oil and natural gas company, accounting for about 71% of the country’s domestic production.

On August 26, 2024, Oil and Natural Gas Corporation Ltd’s share price opened at ₹323.50, touching the day’s high of ₹326.80 as of 09:45 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.