ONGC to pump crude from $5 billion project off Andhra coast

NEW DELHI: State-run ONGC will start pumping crude from its $5-billion project off the Andhra coast in the next fortnight, bringing on stream the delayed project that is pivotal for reversing the company’s declining fortunes as a result of maturing fields.
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 Q2 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 three-four wells being put into production initially. This is to avoid mistakes that led to disastrous consequences in 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 2 McMillan (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 mmscmd 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 was to start in November 2021 but construction was delayed.

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