ONGC makes 5 new discoveries in May 2007

Oil & Natural Gas Corporation Ltd (ONGC) has announced that the Board of Directors of the Company at its meeting held on June 07, 2007, has taken the following major highlights:

1. A record five discoveries by ONGC in May, 2007
2. Completion of Mumbai High South Redevelopment Project 19 months ahead of schedule on May 31, 2007.
3. Agreement with PETROBRAS for swapping of Interests in Offshore blocks in India and Brazil.
- A record five discoveries by ONGC in May, 2007

1. MDW-4A Well in Mahanadi Basin

ONGC made second discovery in Mahanadi Basin in MN-DWN-98/3 block in East Coast of India about 60 Km off Paradeep Coast. The Well MDW-4A at a water depth of 1087 Mtrs. produced gas with a high flow potential, through straddle packer from a depth of around 1800 Mtrs. within Mio-Pliocene formation. The block has been bid by ONGC exclusively without any partners under NELP-I. ONGC has drilled 5 Wells in Mahanadi Basin and made the first discovery in 2006.

2. Disangmukh-3 discovery in Sibsagar

Disangmukh-3 well, spudded on December 24, 2006, in Sibsagar District PEL (Nomination Block), in Assam & Assam Arakan Basin produced oil @1421 barrels/day through 6 mm bean from a depth of 3688-3677 m. The flow rate of oil is highest among the discoveries in North East. Oil is of very good quality sweet crude with API gravity of 33 and pour point 300C. Disangmukh structure is situated at a distance of 8 km north of Rudrasagar field close to Brahamputra river.

Disangmukh is the first prospect probed by ONGC in the Assam Shelf way back in 1959, which gave positive indications.

3. Panidihing-6 discovery near Brahmaputra River

New oil prospects have been found in well Panidihing-6 in Assam & Assam Arakan Basin and the well produced oil @ 516 barrels /day with 5mm bean from a depth of 4256-4258 m. The Panidihing prospect is located near Brahmaputra River about 27 kms to the north of Nazira town. This well is the second producing well over Panidihing prospect.

This is a very significant discovery after Disangmukh-3 well as both of these prospects are producing from the same formation i.e. Tura formation from different areas indicating a new deeper play with significant production potential in this area. It opens up new prospects in North Assam Shelf for further exploration in other areas of Lakwa - Lakhmani, Rudrasagar where similar prospects are buried in deeper depths.

4. Kunjaban-2 discovery in North Agartala

Gas has been discovered for the first time in the North Agartala PEL nomination block in Tripura and the well Kunjaban-2 (KUAC), spudded on December 19, 2006, produced gas @100,000 m3/d through 6 mm bean from a depth of 2687-2682 m. Further testing is in progress and potential of the field is being assessed. The present discovery at Kunjaban is a new prospect located North of Agartala Dome. This discovery will add to the tally of gas fields in Tripura and help in meeting additional gas requirements for the planned Tripura Power Project.

5. Uppidi-1discovery in KG Basin

Uppidi-1 (UPAA) well, spudded on March 21, 2007, in PEL Block-1B (Pre-NELP) in KG basin produced gas @99,840 m3/d and condensate @ 91 barrels/day through 6 mm bean from a depth of 2167-2163 m. This is again a new discovery and potential of the field is being assessed.

- Completion of Mumbai High South Redevelopment Project - 19 months ahead of schedule on May 31, 2007

Mumbai South Redevelopment Project which commenced on October 16, 2001 has been completed successfully 19 months ahead of schedule on May 31, 2007 against the scheduled completion of December, 2008.

The Project envisages incremental production of oil and gas with an investment of around Rs 6,500 crores. The Project includes installation of 10 new well platforms laying of new pipelines and upgrading of existing facilities besides drilling of 140 new wells.

- Agreement with PETROBRAS for swapping of interests of Offshore blocks in India and Brazil

ONGC has signed an Heads of Agreement with Petroleo Brasileiro S.A. (Petrobras) for swapping of interests in offshore blocks in India and Brazil. The Agreement was signed by Chairman, ONGC Group of Companies, Mr. R.S. Sharma, and the President of Board of Directors of Petrobras, Mr. Jose Sergio Gabrielli De Azevedo in the presence of Hon’ble Prime Minister of India, Dr. Manmohan Singh and the visiting Brasilian President H.E. Luiz Inacio Lula da Silva, on June 04, 2007 at the Hyderabad House in New Delhi.

Petrobras, ONGC and OVL have entered into a Heads of Agreement (HOA) under the MOU signed in September, 2006. The Heads of Agreement establishes the basic terms and conditions for assignment of 25% Participating Interest each in the Blocks BM-SEAL-4, BM-S-17 and BM-BAR-1 in Brazil by Petrobras to OVL and assignment of 15%, 40% and 25% Participating Interest in Blocks KG-DWN-98/2, MN-DWN-98/3 and CY-DWN-2001/1 respectively in India by ONGC to Petrobras.

Mr. R S Sharma, Chairman and Managing Director said after the Board Meeting that these discoveries are very significant for ONGC as the discoveries have taken place in new formations and may lead to many more exploration prospects in the near future.

II. ONGC Board approves investments in development of B-Cluster fields in Western Offshore The ONGC Board in its 167th Meeting approved the Development of B-Cluster Marginal Gas fields (B-46, B-48, B-105 & B-188) located North West of Mumbai High field. The total cost of the project is approximately Rs. 1285 Crore with a Foreign Exchange component of approximately Rs 1240 Crore. These fields together hold in-place gas volume of 11.298 BCM in probable category as on April 2007.

After development the fields with produce 1.636 MMSCMD of gas and 2890 bpd of Condensate. The envisaged cumulative gas & condensate production is of the order of 5.273 BCM and 1,684 MMm3 respectively over a period of 12 years.

As the fields are close to Mumbai High filed, the production facilities of Mumbai High North will be utilized thus minimizing the development cost. The project will be completed by April 2010, to match the commissioning of MHN Complex.

Source : Equity Bulls

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