The board of Oil and Natural Gas Corporation (ONGC) has approved a plan to invest $5 billion in its east coast oil and gas fields to raise production, as India looks to reduce imports and become energy sufficient.
The energy major said in a statement that the approved part of the block, called Cluster 2, in the Krishna-Godavari basin is estimated to produce 23.56 million tonnes of oil and 50.70 billion cubic metres of gas.
Company officials said it was by far the biggest investment devision taken by the company in its history and that it will all be funded through internal resources.
The plan, which was announced days after the government unveiled its new oil and gas exploration policy, includes development of Cluster 2A for oil and associated gas fields and Cluster 2B for free gas fields. The project is expected to be completed by June 2020, with gas production expected to start by June 2019 and crude by March 2020.
The peak daily production rate from the Cluster 2 works out to 16.89 percent and 27.60 percent of ONGC’s current production rate of crude oil and natural gas respectively, the statement said.
The increased production will help hike the company’s profit after tax by $585 million by fiscal 2021, ONGC’s Director – Finance, A K Srinivasan, was reported as saying.