Oil and Natural Gas Corporation is investing over Rs 50,000 crore ($10 billion) in developing new oil and gas fields and increasing output from existing ones, company's chairman R S Sharma said on Wednesday.
Of this amount, over Rs 16,000 crore (Rs 160 billion) is being invested to improve output from seven fields, he told company's shareholders.
ONGC had invested over Rs 14,000 crore (Rs 140 billion) in 14 Improved Oil Recovery/Enhanced Oil Recovery schemes (during 2000 to 2009) to raise recovery factor to 33 per cent from 28 per cent earlier, he said.
The investments would help the company offset the decline in output that has set in mature fields like Mumbai High.
ONGC is investing more than Rs 15,000 crore (Rs 150 billion) in the second phase of redevelopment of its prime Mumbai High fields in the western offshore. It is investing Rs 8,061.42 crore (Rs 80.61 billion) in Mumbai High South by April 2011 for an incremental 20.7 million tonnes of oil and 3.32 billion cubic meters of gas by 2029-30.
Besides, ONGC is investing Rs 6,855.93 crore (Rs 68.55 billion) in Mumbai High North by September 2012 for an additional 17.35 million tonnes of oil and 2.98 bcm of gas by 2029-30.
It is investing Rs 1,262.93 crore (Rs 12.62 billion) by 2011 in G-1 and GS-15 fields, its first major east coast development, to boost gas output by 2.62 million cubic meters per day.
Besides, Rs 3,195.16 crore (Rs 31.95 billion) in development of C-Series fields off the Mumbai coast would give 15.14 bcm of gas in 15 years.
Other investments include Rs 2,305.30 crore (Rs 23.05 billion) in Heera and South Heera redevelopment, Rs 2,323.40 crore (Rs 23.23 billion) in B-22 cluster fields, Rs 1,436.21 crore (Rs 14.36 billion) in B-46 cluster fields and Rs 3,248.78 crore (Rs 32.48 billion) in B-193 cluster fields off the west coast.
Sharma said ONGC has charted out three 'strategic pursuits' including intensifying exploration, improving recovery factor from existing fields and aggressively pursuing for overseas projects.
As part of intensified exploration that aims to create new oil and gas assets, ONGC in 2008-09 fiscal accreted 284.81 million tonnes of oil equivalent of inplace hydrocarbons reserves, the highest in the last two decades.
"Ultimate reserve accretion of 68.90 million tonnes of oil equivalent from domestic operated fields is again the highest in 18 years," he said.
ONGC Videsh Ltd, overseas arm of the state-run firm, will aggressively pursue overseas exploration and production projects, he said. OVL has 40 projects in 16 countries.
"During 2008-09, OVL acquired seven E&P projects in five countries, two being producing properties," Sharma said.
"As a result, the ultimate reserves accretion of 135.08 million tonnes during the year has been the highest-ever."
ONGC's output of oil and gas from domestic and overseas assets was marginally lower at 61.23 million tonnes of oil equivalent in 2008-09 as against the highest ever production of 61.86 million tonnes of oil equivalent the previous fiscal.
Of this, 8.78 million tonnes of oil and oil equivalent gas were from overseas projects, Sharma said.
Stating that international crude oil prices had peaked to $147 per barrel in July 2008 before plummeting to $33 a barrel in December that year, he said the prices crashed down not because of any supply glut but due to sudden slump in demand which increased the spare capacity.
"However, we must realise that this spare capacity cushion is bound to erode once the economies recover which seems to be happening faster than expected," he said. "We apprehend this may again bring uncertainty and volatility in the markets."
The economic downturn has however not impacted the company's investment plans as reflected in highest ever capital expenditure of Rs 21,820 crore (Rs 218.2 billion) in 2008-09, he said, adding 94 per cent of this was in the core activity of exploration and production.
OVL invested Rs 16,105 crore (Rs 161.05 billion).
Of the investments in improving recovery factor, ONGC is investing Rs 219.22 crore (Rs 2.19 billion) in IOR scheme at Rudrasagar fields, Rs 834.90 crore (Rs 8.34 billion) in Geleki and Rs 429.38 crore (Rs 4.29 billion) in IOR scheme at Lakwa-Lakhmani.
Image: An ONGC rig
