ONGC announces oil discovery in Bay of Bengal

ONGC announces oil discovery in Bay of Bengal

Mumbai: India’s state-run Oil & Natural Gas Corp. has made a “significant" oil discovery in the Bay of Bengal, off India’s eastern coast, the company said on Tuesday.

The discovery, in Krishna Godavari basin, 15 kilometers off the coast of Andhra Pradesh, “augurs well as it marks the ONGC’s determined efforts to put the KG Offshore to new and higher levels of oil production," the company said in a statement.

ONGC, the nation’s largest oil and gas exploration company, did not reveal the total size of the find. The title of its statement said: “ONGC announces significant discovery in Krishna Godavari Offshore."

The company said production, in conjunction with several nearby blocks, would start at 20,000 barrels a day by 2013 and peak at 150,000 barrels a day by 2017.

At $40 a barrel, that volume could add $1.8 billion to ONGC’s earnings before interest, taxes, depreciation and amortization, Credit Suisse said in a Tuesday note.

Credit Suisse called the new find “a significant quantity," which allays concerns about declining domestic production elsewhere.

Credit Suisse also said the discovery reaffirms hydrocarbon prospects in the shallow waters of the Krishna Godavari basin, where Reliance Industries Ltd. and Gujarat State Petroleum Corporation Ltd. also have interests.