THE production of crude oil and natural gas from ONGC’s ageing onshore oil fields is falling fast, which will have an adverse impact on its performance in the future. In the December 2008 quarter, ONGC’s production from its onshore assets is likely to report a 7% fall in crude oil and 1% in natural gas.
ONGC’s onshore production from its onshore fields in Assam, Gujarat, Andhra Pradesh and Tamil Nadu contributes nearly 30.5% of its total domestic production of 26 million tonnes per annum, or 0.52 million barrels per day. These onshore fields also represent over 26.4% of ONGC’s annual natural gas production of 22.3 billion cubic meters, or around 62 million cubic meters per day.
ONGC has more than 120 producing onshore oilfields, out of which 32 fields, comprising 15 major and 17 medium, contribute 85% of the total production. All these fields are more than 30 years old. “All our onshore fields are mature and are in the natural declining phase. We have been successful in restricting the fall at around 1.5% annually. Unless there are new discoveries, the production from our onshore fields will continue to fall at around 1.5-2% annually,” informed ONGC director (onshore) AK Hazarika.
Adding new fields to its portfolio is the only option available with ONGC to ensure its petroleum production grows in future. However, a number of its recent discoveries have been gas fields. This would mean pipeline connectivity for monetisation. ONGC is currently setting up a power plant in Tripura to utilise the available gas, which can’t be shipped outside the region due to lack of connectivity.
ONGC is planning to spend around Rs 2,000 crore on revamping these onshore fields during FY2010 in a bid to maintain their production level. “With crude oil prices at $40 per barrel levels, the economics of the capex plans will have to be re-evaluated. In next year’s budget, we are projecting around 1.5% fall in our onshore production from the current year,” added Mr Hazarika.
The onshore crude oil production of ONGC, which grew 6% YoY in May 2008, reported a 1% growth in June but fell 2% YoY in July, followed by a 3% fall in August, 4% in September and was 8% lower in November 2008 compared with the November 2007 production. The onshore production in the month of November 2008 at 614,000 tonne was the lowest in at least two years as revealed by the petroleum ministry figures. In case of natural gas, the onshore production has remained almost flat in 2008 compared to 2007.
ONGC’s crude oil production from Assam has been suffering from local issues preventing it from operating these fields continuously. The oil and gas production from Assam fields has remained consistently lower on a YoY basis in 2008. In November 2008, ONGC’s production of crude oil was 10% down and natural gas was 5% down compared with November 2007 figures.
The production from Gujarat is suffering from reduction in reservoir pressure, leading to increase in water content of the total production and also a lack of continuous power supply. Gujarat reported a 4% fall in natural gas and an 8% fall in crude oil produced during November 2008. Although the crude oil production in Tamil Nadu is on a sharp decline over past few months, ONGC has been able to increase the natural gas production from these fields substantially. Despite the problems on the onshore front, ONGC’s offshore oil production from the Mumbai High oilfield continues to remain on track and is not expected to report any fall on YoY basis, although the natural gas production is declining at around 2%.
No comments:
Post a Comment