Output from the KG-DWN 98/2, the second deep sea project in the east coast after RIL-BP’s KG-D6 acreage, will give a fillip to domestic oil production at a time when dependence on imports is rising on the back of expanding oil demand.
The additional volumes will raise the company’s profitability, director (finance) Pamila Jaspal said after lower production due to natural decline from existing fields contributed to a 20% drop in the September quarter profit.
The $1.6-billion infrastructure being built for the block is India’s largest subsea development project. Director (production) Pankaj Kumar said ONGC is opting for a slow start with 3-4 wells being put into production initially.
This is to avoid mistakes that led to disastrous consequences for the D1/D3 gas fields in RIL-BP’s KG-D6 block. A high-volume production launch could lead to a drop in well pressure and result in sand or water ingress choking the wells.
Kumar said some 2 mcmd (million cubic meters per day) of associated gas will also flow with oil but actual gas output will start in May 2024, when 7-8 mcmd production is expected.
Peak oil of 45,000 barrels/day is expected sometime in 2024-25. At peak, a tanker will berth alongside floating storage facility every two weeks to transport crude.
Oil production from the block was to start in November 2021 but the project construction was delayed due to the pandemic and construction-related issues.