ONGC is to spend about USD 4 billion for exploration in the next three years

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Shweta Routh
Shweta Routh
Shweta Routh is a third-year student at KIIT University's School of Mass Communication. Her ambition is to become a good journalist and serve her country. She is a classical dancer who enjoys meeting new people and trying new things.

Maharatna, the Oil and Natural Gas Corporation (ONGC), says that it has made a significant move toward reducing oil imports and becoming self-sufficient in the energy sector. On May 26, ONGC announced an investment of Rs. 31,000 crore or about USD 4 billion for the next three fiscal years, FY 2022-25, to boost its exploration activity for fuel reserves. This is a 50% intensification compared to its exploration expenditure over the last three years, which was Rs. 20,670 crores or about USD 2.7 billion. The company stated that the ONGC’s 349th board meeting was exclusively scheduled to determine its future exploration strategy. 

The company said it had framed an extensive roadmap to boost its future exploration campaign. ONGC stated that it intends to maximise international collaborations with reputable global majors for this. 

ONGC also stated that it intends to maximise international collaborations with reputable global companies.

According to the statement, the government and ONGC’s internal programme facilitate and fund the exploration intensification activities. 

ONGC is attempting to explore around 1,700 million tonnes of oil and oil equivalent gas (MMTOE) of yet-to-find (YTF) reserves during FY 2022–25 as part of an internal programme.

“Re-exploration of mature basins, consolidation of emerging basins, and probing of emerging and new basins” are the three components of ONGC’s internal programme.

A state-of-the-art 2D and 3D seismic survey will be conducted here, followed by the drilling of approximately 115–120 wells at Rs 10,000 crore per year for the next three years.

Furthermore, the government’s cooperation has resulted in the release of approximately 96,000 square kilometres of land that had previously been designated as a “No Go” zone. This will help ONGC achieve its goal of bringing around 5,00,000 sq km of land under active exploration by 2025.

Seventy thousand line kilometres (LKM) of state-of-the-art 2D broadband seismic data acquisition, processing, and interpretation (API) will be done in three sectors—west coast, east coast, and Andaman offshore—under a government-funded programme for evaluation of unapprised offshore areas until the Exclusive Economic Zone (EEZ). By June 2022, ONGC will have completed the technical bid opening (TBO) for seismic data acquisition.

ONGC currently holds two exploration blocks in the Andaman Basin under the Open Acreage Licensing Policy (OALP). The Indian government has also acquired seismic data in some sectors within ‘No-Go’ areas, and a few prospects have already been identified, the company stated, without providing further details.

In the next three years, ONGC plans to drill six wells. Two will be under ONGC committed work programme and four through government funding. Reputable international companies/consultants are being sought to assess the basin in preparation for future exploration and exploitation plans.

ONGC’s Exploration Performance

ONGC has also declared its exploration performance on Saturday, May 28, 2022. 

According to the release statement of ONGC, the company made four discoveries in its operated landholdings during FY 2021–22, two on land and two offshore. Three are prospects; 1 on land, two offshore, and one is a new pool (on land).

On testing, the exploratory well Hatta # 3 in the Son valley sector of Madhya Pradesh produced gas at a 62,044 m3/day rate, confirming the potential of commercial production from the Vindhyan Basin and paving the way for the establishment of India’s ninth producing basin. ONGC is considering several early monetisation options.

During the year, six hydrocarbon discoveries were monetised, including two that were announced during the fiscal years 2021–22. 

The following are the details of the most recent prospect discovery announced since the last press release in this regard on February 11, 2022:

The exploratory well SD-4-4 was drilled in the C-Series Nomination ML Block in the Mumbai Offshore. In the Daman Formation, two objects were tested: object-I flowed gas at 4,522,351m3/d, condensate at 1004bpd, and object-II flowed oil at 1747bpd with gas at 30,291m3/d. With these findings, the presence of commercial hydrocarbons, particularly oil, along the rising flank of the Eastern Margin fault has been established. The prospectivity of such fault blocks could aid the potential for extracting oil accumulations in the Tapti Daman area.

 ONGC-Operated Domestic Areas Reserve Replacement Ratio (RRR)

Domestic Reserve Replacement Ratio (2P) (excluding JV share) was 1.01. For the 16th year in a row, ONGC has achieved a Reserve Replacement Ratio (2P) of more than one.

Reserve augmentation (estimated ultimate recovery: EUR,2P) for the fiscal year 2022: The domestic areas operated by ONGC are worth 40.82 MMTOE, and ONGC’s share of domestic JVs is worth 0.83 MMTOE. Domestic ONGC is valued at 41.65 MMTOE. The company’s share of foreign assets is worth 31.53 MMTOE. The total worth of the ONGC group is 73.18 MMTOE.

What will happen if India becomes self-sufficient? 

According to the report, Pricewaterhouse (Pwc) estimates that India’s GDP will increase by up to 6.5 per cent if the country avoids crude oil imports and becomes self-sufficient in oil production. 

The country imports 85% of its oil. This fueled a significant weakening of the rupee and resulted in a $12.8 billion foreign exchange loss.

According to PWC, if a country successfully met the 50% domestic requirement, it would generate $47.2 billion. 

In addition, the sector would become sufficient to provide 9.4 million people with employment for a period of 20 years.

The economic benefits of becoming self-sufficient can generate extra inflow for the government equal to nearly 25% of the government’s current total revenues from the petroleum sector.


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