ONGC To Begin Oil Production From $ 5 Billion Deep-water Project

The state-controlled Oil and Natural Gas Corporation (ONGC) will begin oil production from its long-delayed flagship deepsea project in the Krishna Godavari basin of the Bay of Bengal this month, helping to reverse years of decrease in output. "We plan to start producing from the Cluster-2 project in KG-DWN-98/2 block this month and slowly ramp up," ONGC Director (Production) Pankaj Kumar added 

A floating production unit, called FPSO, which will be used to produce oil, is already in the block. After several missed deadlines, ONGC has told Shapoorji Pallonji Oil & Gas (SPOG) that its floating production, storage and offloading vessel (FPSO) Armada Sterling-V should prepare to receive the first oil this month. Oil production from Cluster-2 should have begun by November 2021, but was delayed because of the pandemic, as per PTI.

Kumar said ONGC plans to start producing from 3 to 4 wells initially and slowly connect others. "Initial production could be 8,000 to 9,000 barrels per day."

The KG deepsea is dangerous territory, and ONGC is wary of repeating the mistakes of Reliance Industries' neighboring KG-D6 block. While gas production in the area is not particularly complicated, sand and water infiltration in wells may occur if oil valves are opened too quickly. An official emphasized that the idea is to drill more wells and produce at optimal quantities rather than rushing in to create larger volumes.

Kumar stated that the first shipment of crude oil will be sent to ONGC subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL). According to him, the petroleum will be analyzed, and yields will decide its quality and cost.