ONGC to invest $5 billion to develop KG basin deepwater block.

The ONGC board has approved a $ 5.076-billion field development plan for a portion of its deepwater oil and gas block in the Krishna-Godavari basin on the east coast.

The investment translates into ₹34,012 crore and the total production estimated is 23.526 million tonnes of crude oil and 50.706 billion cubic metres of natural gas. The investment is for developing cluster 2 of the KG-DWN-98/2 block. The block is divided into three clusters.

The investment announcement comes less than three weeks after the government gave pricing and marketing freedom to gas produced from deepwater, ultra deepwater and high temperature high pressure fields. The pricing freedom will have a cap determined by the lowest of either imported fuel oil, weighted average of landed price of coal, fuel oil and naphtha or the imported LNG's landed price.

“The peak rate of production will be 77,305 barrels of oil per day and 16.56 million standard cubic metres of natural gas per day. This is the biggest-ever financial decision taken by ONGC in its history,' said ONGC’s Chairman and Managing Director D K Sarraf.

The first production of natural gas is expected in June 2019 and crude oil production is expected to begin in March 2020.

HBL