Symbolic picture only. , Photo Credit: Reuters
India’s biggest oil and gas producer ONGC will reverse years of output decline this year and gradually increase production thereafter, a top company official said, as it invests billions of dollars to ramp up production from new discoveries. .
Oil and Natural Gas Corporation (ONGC) produced 21.707 million tonnes of crude oil, which is refined to produce petroleum products such as petrol and diesel, and 21.68 billion cubic meters (BCM) of natural gas in the financial year 2021-22. Gas is produced, which is used. Production of electricity, manufacture of fertilizers and as CNG in automobiles.
ONGC Chairman Arun Kumar Singh said, “We are definitely looking forward to increase oil and gas production in 2023-24 and even in the current year.” PTI,
Crude oil production is estimated to increase to 22.823 million tonnes and gas production to 22.099 BCM in the current financial year (2022-23). Oil production will increase to 24.636 million tonnes in the next financial year and 25.689 million tonnes in 2024-25.
Natural gas production is expected to increase to 25.685 BCM in 2023-24 and 27.529 BCM the following year. ONGC, which contributes about 71% of India’s domestic production, has reported a gradual decline in output for over a decade as its fields become older and older.
The government has considered giving ONGC’s biggest oil and gas fields to private and foreign companies in an effort to boost production but has faced internal resistance. Shri Singh said that the company is ready to participate in technologically difficult areas.
ONGC is investing Rs 59,000 crore in 20 major projects, including bringing into production the oil and gas reserves discovered in the deep sea KG block KG-DWN-98/2 (KG-D5) and the fourth phase of the Mumbai High field. includes redevelopment.
While investment in KG-D5 will bring in additional production, spending on redevelopment of Mumbai High- and other areas currently producing will help arrest natural decline in older areas.
The company will soon add a floating production system (FPSO) and subsea facilities. First oil from KG-D5 is expected in May 2023 and peak output of 45,000 barrels of gas per day (2.25 million tonnes per annum) and about 12 million standard cubic meters per day in 2024-25. The block is expected to produce 19.35 lakh tonnes of oil and 2.784 BCM of gas in 2023-24.
Mr Singh said ONGC would continue to invest around ₹30,000 crore per year on capital expenditure, with the aim of arresting the decline in production and subsequently increasing it. The levy of windfall profit tax on domestically produced crude oil will not affect capex expenditure.
The levy is triggered at any price above $75 a barrel, which is a fairly good rate for ONGC to spend on finding and producing oil and gas in the coming years. The firm has a little under 600 hydrocarbon discoveries. Most of them were either in production or action has been initiated to monetize them.
The output enhancement roadmap addresses the monetization plans of all ONGC’s discoveries, except about 42 discoveries, which are isolated/away from existing infrastructure or have very low volumes or are located in difficult areas.