State-owned ONGC may invest about $5 billion in its KG basin block KG DWN 98/2 to produce 17 million cubic meters per day (mcmd) of gas and 75,000 barrels per day (bpd) of oil by 2019 fiscal.
- The announcement comes within days of the government freeing up natural gas pricing.
- This fresh investment in developing the KG DWN 98/2, with reserves of 70 billion cubic meters (bcm) of gas and 23 million tonnes of oil will be over and above the capital expenditure of Rs. 30,000 crore for FY17.
- KG DWN 98/2 is next to the famous KG D6 block, owned by Mukesh Ambani-led Reliance Industries Limited (RIL), which reportedly pumped $1.4 billion worth of gas from ONGC’s field.
- ONGC has taken the decision to develop the block itself without any foreign partners.
- Earlier, ONGC partnered global oil majors of the likes of Norway’s StatOil, Brazil’s Petrobras and Chevron Corp. of U.S. to develop the block but they all walked away due to delays and bureaucratic hurdles.
While ONGC has announced its investment plans to develop its deepwater block in KG basin, other players like (RIL), Gujarat State Petroleum Corporation (GSPC) and Cairn India are likely to follow the suit as government’s reform decisions in the hydrocarbon sector to move towards a transparent market economy are expected to unlock significant investments of close to $30-$40 billion in the exploration sector alone, according to industry body CII.
About ONGC
- Oil and Natural Gas Corporation Limited (ONGC) is an Indian multinational oil and gas company headquartered in Dehradun, Uttarakhand, India.
- It is a Public Sector Undertaking (PSU) of the Government of India, under the administrative control of the Ministry of Petroleum and Natural Gas.
- It is India’s largest oil and gas exploration and production company. It produces around 69% of India’s crude oil (equivalent to around 30% of the country’s total demand) and around 62% of its natural gas.
- ONGC was founded on 14 August 1956 by Government of India, which currently holds a 68.94% equity stake.
- Chairman: Dinesh Kumar Sarraf
