Kakinada: The ONGC is preparing to auction marginal gas and oil fields under Krishna Godavari basin to private parties. The Corporation has already auctioned seven such fields.
Now it has identified 21 fields out of which eight fields are being prepared for auction in the next four to five months.
The ONGC is finding it uneconomical to exploit the marginal fields as it has to be produced to feed the trunk pipeline. Otherwise, the cost cannot be recovered. Officials say that therefore these fields will be auctioned to private parties who will exploit the gas, set up units in the vicinity or find other uses for it.
A large number of marginal fields have been discovered since the 1970s on land and offshore areas, which due to economic reasons, were not considered feasible for development. With improved infrastructure, and cheaper enabling technology, some of these idle assets are becoming viable for monetisation.
During the last couple of years, ONGC is focusing hard to improve its production by early development and monetisation of 165 products, improved infrastructure, as well as new marginal fields having total recoverable reserves of about 336 MMTOE.
These include 86 on land and 79 offshore fields including deep water. The cumulative production from these fields has already touched 14.26 MMT and last year marginal fields accounted for 2.67 MMt (O+OEG) productions.
Uncertainly in the amount of recoverable reserves, high cost associated in acquiring further reservoir information as well as high capital expenditure are the dilemmas the industry is facing in developing small accumulations. About 84 per cent of total ultimate reserve of marginal fields is locked up offshore and the corporation has taken the initiative for development of offshore marginal fields on fast track.
“After doing good due-diligence for development strategy, cost optimisation and project economics, ONGC has been able to put on production 58 fields, 578 through in-house efforts and one through service contact. Development schemes are under various stages of implementation for another 26 offshore fields and it will be put on production by the end of financial year 2015,” an official of the Corporation said.
