Mumbai: Oil and Natural Gas Corp. Ltd, the state-owned exploration major, has drawn up plans to invest Rs10,000 crore across Assam and Tripura where the firm has large areas under exploration. This will be its first major investment in the north-eastern region in the last 40 years.
ONGC chairman and managing director R.S. Sharma, who visited the region early this week, said the investments will go into upgrading existing assets in both states to increase production. “We will also set up a 740-megawatt gas-based power plant in Tripura,’’ he added.
The power plant, including transmission lines, is expected to cost Rs5,000 crore and the rest of the money would be used to upgrade equipment and facilities in the Assam oil fields and developing the new gas field at Cachar, discovered in 2002, he said.
Though the ONGC plan to put up the power plant is not new, the company has now fixed the timeframe. The plant, to be commissioned in February 2011, will mark its foray into power generation.
The company, which struck gas in Tripura in the early 1980s, has not been able to find consumers in the region, and plans to transport the gas to West Bengal also failed to take off. It has since capped production at 10 lakh million cubic metres per day (mcmd) against a capacity of 45 mcmd.
New plans: R.S. Sharma, chairman and managing director of Oil and Natural Gas Corp., India's biggest oil producer.
‘‘With the power plant coming up, the gas off-take from the field would be assured and we can gear up towards optimal gas production from the field,’’ Sharma said.
All of ONGC’s existing equipment in the Assam fields is set for replacement as most of it is well past its ‘sell-by date.’ “We will replace almost all of them, including critical rig equipment. We will also replace parts of the pipeline to address leakages,” he said.
Global tenders have already been called for and the orders will be placed by the end of the year. According to Sharma, new equipment will be delivered in three years and the company expects to raise production once new equipment is in place.
The revamp plan for Assam blocks includes repair, revamp of all old installations that are ageing, replacement of old and unsafe pipelines, drilling of several new high-tech wells, and upgrade of drilling and work-over rigs.
ONGC has over 600 wells in the state but only around half are operational. Once the new equipment is in place, the company targets to raise the oil production in the state from the current level of 1.4 million tonnes (mt) to 2.5 mt in the next three to four years.
ONGC’s oil production from Assam peaked to 3.03 mt in 1989-90. Thereafter, production went downhill, due to ageing fields and obsolete equipment and facilities, most of which were built 40 years ago.
Assam has over 1.3 billion tonnes of crude oil and 156 billion cubic metres of natural gas reserves. About 58 % of this is yet to be explored. Other operators in Assam include Oil India, Reliance Industries Ltd, Bharat Petroleum and Premier Oil.