ONGC will start oil production from KG basin this month

New Delhi State-controlled Oil and Natural Gas Corporation (ONGC) will kick off oil production from its much-delayed flagship deepsea project in Krishna Godavari basin in Bay of Bengal this month, helping reverse years of decline in output, a senior company official said. “We plan to start producing from the Cluster-2 project in KG-DWN-98/2 block this month and slowly ramp up,” ONGC Director (Production) Pankaj Kumar said. A floating production unit, called FPSO, which will be used to produce oil, is already in the block. After several missed deadlines, ONGC has told Shapoorji Pallonji Oil & Gas (SPOG) that its floating production, storage and offloading vessel (FPSO) Armada Sterling-V should prepare to receive the first oil this month. Oil production from Cluster-2 should have begun by November 2021, but was delayed because of the pandemic. Kumar said ONGC plans to start producing from 3 to 4 wells initially and slowly connect others. “Initial production could be 8,000 to 9,000 barrels per day.” KG deepsea is treacherous terrain and ONGC is mindful of not repeating mistakes of neighbouring KG-D6 block of Reliance Industries. While gas production is not so complex in the area, sand and water ingress in wells may happen if oil valves are opened too fast. The trick is to drill more wells and produce at the optimal quantities, not rushing in to produce bigger volumes, an official explained. Kumar said ONGC will ship the first consignment of crude oil to subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL). The crude will be tested and yields will determine its grade and pricing, he said. ONGC has hired Armada Sterling-V, owned 70 per cent by SPOG and 30 per cent by Malaysia’s Bumi Armada, for producing oil from below seabed. The FPSO has been waiting to receive oil since January 2, 2023, after she was hooked up on December 27, 2022. ONGC previously set May 2023, as the first Cluster-2 oil deadline, extended to August 2023, September 2023, and finally, October 2023. “These are extremely complex reservoirs and we need to be sure about everything before we start production,” Kumar said. The five M field wells, identified for the initial oil flow, sit in water depths of about 400 meters. Flexible hoses will connect the M field wells to the FPSO. Later, the A and P1 oilfield wells will be connected.