|ONGC chairman Sarraf|
“With the new gas pricing model, the discovery had become more viable for production. The investment decision will be taken in next couple of weeks,” Sarraf said. The announcement came...
within days of the government freeing up natural gas pricing.
ONGC has taken the decision to develop the block itself without any foreign partners. Saraff said the Maharatna PSU won’t be partnering with any foreign players for the project. He was quoted by a leading daily, “Going by the confidence shown by the ONGC team, we have decided to develop the block on our own. All the technical expertise and project management consultants (PMC) are available in the market.”
This will further give a boost to Narendra Modi’s pet initiative Make in India.
Though foreign collaboration is not undermined, the PSU has been focusing on making use of its already developed technical expertise.
This new investment in developing the KG DWN 98/2, with reserves of 70 billion cubic meters (bcm) of gas and 23 million tonnes of oil will be over and above the capital expenditure of Rs. 30,000 crore for FY17.
KG DWN 98/2 is next to the famous KG D6 block, owned by Mukesh Ambani-led Reliance Industries Limited (RIL), which reportedly pumped $1.4 billion worth of gas from ONGC’s field.
ONGC had already partnered global oil majors of the likes of Norway’s StatOil, Brazil’s Petrobras and Chevron Corp. of U.S. to develop the block but they all walked away due to delays and bureaucratic hurdles.
While ONGC has announced its investment plans to develop its deepwater block in KG basin, other players like (RIL), Gujarat State Petroleum Corporation (GSPC) and Cairn India are also likely to increase their investment following government’s reform decisions in the hydrocarbon sector. The goal of the government move is to create a transparent market economy are expected to unlock significant investments of close to $30-$40 billion in the exploration sector alone, according to industry body CII.
India’s the top profit-making PSUs during 2014-15, ONGC is under the administrative control of the Ministry of Petroleum and Natural Gas and is India's largest oil and gas exploration and production company and produces around 70 percent of India's crude oil (equivalent to around 25 percent of the country's total demand) and around 60 percent of its natural gas. With a market capitalisation of over Rs 2 trillion, ONGC is one of India's most valuable publicly-traded companies. ONGC is ranked as the top energy company in India, fifth in Asia and 21st globally as per Platts Top 250 Global Energy Rankings. It was ranked 21st among global Oil and Gas Operations industry in Forbes Global 2000 list of the World's biggest companies for 2014.