The country's largest explorer, ONGC, has decided to defer development of its two deepwater blocks in the Mahanadi basin — MN-DWN-98/3 and MN-OSN-2000/2. The government- owned exploration firm discovered about 1 trillion cubic feet (tcf) of natural gas in these blocks, which are economically viable only at a gas price of $10.72-$12.63/mmBtu. The current price of domestic gas is $4.2/mmBtu. A director on the board of ONGC told FE that the explorer's focus was on monetising projects that can boost stagnant production at current prices at a faster rate than spending resources on deep water acreages, which require heavy investment and do not even yield returns.
ONGC drilled marginally more crude oil in Q1FY15 at 6.057 million tonne against 6.007 million tonne in the same quarter last year. On the other hand, natural gas output dropped 2.34% to 6.036 bcm in April-June FY15 against 6.181 bcm in the same period previous year.
The Manmohan Singh-headed UPA government had given a go-ahead to the Rangarajan-approved gas pricing mechanism, which would have doubled gas prices from the current $4.2/mmBtu. However, the present government is yet to implement a new pricing regime, deferring it till mid-November.
The ONGC director said the Maharatna’s focus was on projects including Daman, third- phase re-development of Mumbai High, KG-DWN-98/2 in the prolific KG basin and additional development of the South Bassein field in the Western offshore.
ONGC targets to ramp up its standalone gas output manifold to about 100 billion cubic metres (bcm) by 2022 against 23.28 bcm in FY14. According to analysts, the ONGC management has maintained its FY15 production guidance of 27.14 million tonnes for crude oil (up 4.4% year-on-year) and 25.34 bcm for gas (up 2% year-on-year).
“Delay in gas price hike is a concern, raising uncertainty for FY15/16 earnings,” said ICICI Securities in a recent report.
Both MN-DWN-98/3 and MN-OSN-2000/2 were awarded to ONGC in auctioning under Nelp. Earlier, the company, which made about four discoveries in both blocks, was aiming for integrated development. The declaration of commerciality (DoC) of the blocks were already submitted to the regulator,the DGH.
Source: FE
ONGC drilled marginally more crude oil in Q1FY15 at 6.057 million tonne against 6.007 million tonne in the same quarter last year. On the other hand, natural gas output dropped 2.34% to 6.036 bcm in April-June FY15 against 6.181 bcm in the same period previous year.
The Manmohan Singh-headed UPA government had given a go-ahead to the Rangarajan-approved gas pricing mechanism, which would have doubled gas prices from the current $4.2/mmBtu. However, the present government is yet to implement a new pricing regime, deferring it till mid-November.
The ONGC director said the Maharatna’s focus was on projects including Daman, third- phase re-development of Mumbai High, KG-DWN-98/2 in the prolific KG basin and additional development of the South Bassein field in the Western offshore.
ONGC targets to ramp up its standalone gas output manifold to about 100 billion cubic metres (bcm) by 2022 against 23.28 bcm in FY14. According to analysts, the ONGC management has maintained its FY15 production guidance of 27.14 million tonnes for crude oil (up 4.4% year-on-year) and 25.34 bcm for gas (up 2% year-on-year).
“Delay in gas price hike is a concern, raising uncertainty for FY15/16 earnings,” said ICICI Securities in a recent report.
Both MN-DWN-98/3 and MN-OSN-2000/2 were awarded to ONGC in auctioning under Nelp. Earlier, the company, which made about four discoveries in both blocks, was aiming for integrated development. The declaration of commerciality (DoC) of the blocks were already submitted to the regulator,the DGH.
Source: FE
0 comments:
Post a Comment