State-owned Oil and Natural Gas Corporation (ONGC) is seeking partners to rescue the Deen Dayal gas field in the KG basin in Bay of Bengal. The state-owned oil and gas explorer has spent nearly to $1.2 billion over seven years and has seen little success.
ONGC on June 12 sought expression of interest from “global oil and gas companies with requisite technical expertise and financial strength to join as partner (with participative interest) for firming up a viable strategy” for the field, according to the tender document.
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The field has produced negligible quantities of gas since January 2017 when ONGC acquired Gujarat State Petroleum Corporation’s (GSPC) 80 percent interest in the KG-OSN-2001/3 block off the east coast of India.
The block contains the Deen Dayal West (DDW) gas/condensate field, which was discovered by GSPC almost two decades back. During the stake sale to ONGC, the Gujarat government company had showcased the field as a promising prospect.
The field, which was initially said to hold up to 20 trillion cubic feet (tcf) of in-place gas reserves – by far the biggest in any deep-sea field in the country – but was later trimmed to a tenth, has proved to be tougher than anticipated.
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“A total of seven development wells are drilled till date,” ONGC said in the tender document. A development well is one that helps produce hydrocarbon from below the earth’s surface or seabed.
“However, four wells which were completed did not yield good productivity as anticipated and performance was sub-optimal. Severe technical challenges and complications were encountered in the other three wells during drilling and completion phase and had to be abandoned,” ONGC said.
The company now wants a global partner, who could help with the development of DDW. Besides the acquisition cost, ONGC has spent undeclared sum of money in trying to bring the DDW field to production.
The KG-OSN-2001/3 block, which was awarded to GSPC and its partners in the first bid round of New Exploration Licensing Policy (NELP) brought by the then NDA government under Prime Minister Atal Bihari Vajpayee, comprises five fields – DDW, DDE, DDN, DD-DT and DD-BRU. Of these, DDW, which lies about 10 km off the Andhra Pradesh coast, is spread over 37.5 square kilometers and is under development.
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DDW already has a well head platform with 16 well slots, a process platform that has capacity to process 5.66 million standard cubic meters per day of gas, and a subsea pipeline to take the gas to an onshore terminal.
ONGC said the reservoirs in the field are classified as high-pressure high temperature (HP-HT). “The in-place reserves are to the tune of 55 billion cubic meters (1.94 tcf) of gas.” The company intends to undertake a revision of the field development plan that was previously submitted to authorities.
“Considering the technology challenges associated with the field and costs involved, ONGC would like to seek technical expertise to firm up a way forward for future development,” the tender document said.
Interested parties have to submit bids by September 12, according to the document.
According to the field development plan that GSPC submitted to the Directorate General of Hydrocarbons in 2009, DDW was to produce 200-300 million cubic feet a day. However, the output has been a fraction of that.
(With PTI inputs)
