ONGC confident of reversing the fall in production of output, this year

21 Nov 2022 , 07:57 AM

The biggest oil and gas producer in India, ONGC, said on a conference call with investors that it would reverse years of production drop this year and progressively increase output going forward as it invests billions to produce from more recent discoveries.

In the fiscal year 2021—2022, Oil and Natural Gas Corporation (ONGC) produced 21.707 million tonnes of crude oil, which is refined into petroleum products like petrol and diesel, and 21.68 billion cubic metres (bcm) of natural gas, which is used to generate electricity, make fertiliser, and serve as compressed natural gas (CNG) in vehicles.

Production of gas and crude oil are expected to increase in the current fiscal year (2022-23) to 22.099 bcm and 22.823 million tonnes, respectively. Oil output will increase to 24.636 million tonnes the following fiscal year and to 25.689 million tonnes in 2024—25, the management informed investors in a call following the release of second-quarter earnings last week.

Since more than a decade ago, ONGC, which makes up about 71% of domestic production in India, has recorded a steady fall in output, mostly because its fields are old and ageing.

In an effort to increase output, the government has thought about selling the largest oil and gas fields owned by ONGC to private and foreign businesses, but this has run into internal opposition.

ONGC is now investing Rs59,000 crore in 20 key projects, including the fourth phase reconstruction of Mumbai High fields and the exploitation of oil and gas deposits discovered in deepsea KG block KG-DWN-98/2 (KG-D5).

The company will connect a floating production system (FPSO) and subsea infrastructure during the favourable weather window beginning in January, according to those assisting Jaspal at the investor call.

The peak production of 45,000 barrels of gas per day (2.25 million tonnes yearly) and approximately 12 million standard cubic metres of gas per day from KG-D5 is anticipated in 2024—2025. The first oil from KG—D5 is anticipated in May 2023.

In 2023—2024, the block is anticipated to produce 1.935 million tonnes of oil and 2.784 bcm of gas.

A little under 600 hydrocarbon finds have been made by the company. The majority of them were either in use or the process of making money off of them had already begun.

With the exception of 42 finds that are remote, far from existing infrastructure, have very low quantities, or are situated in challenging areas, the roadmap for boosting output addresses the strategies for monetising all of ONGC’s discoveries.

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