Relentless exploration

We are fully satisfied with the redevelopment of Bombay High, says D.K. Pande.-KAMAL NARANG

Interview with D.K. Pande, Director (Exploration), ONGC.

DINESH KUMAR PANDE, Director (Exploration), ONGC, is a many-sided man. A petroleum geologist by profession, he joined the ONGC in 1976. He has extensive knowledge of the geology and geophysics [G&G] of the various basins of India. His contribution in the sphere of exploration has been innovative and he was instrumental in the discovery of the Ravva oilfield in the eastern offshore. He was the deputy leader of the fourth Indian expedition to the Antarctica. Excerpts from Pandes responses to an email interview:

Is it appropriate for the ONGC to go for drilling in deep- and ultra-deep water blocks when there is a worldwide shortage of rigs? How do you plan to tackle this?

The exploratory drilling programme in deep-water or ultra-deep water blocks is guided by the commitments made for the blocks and are governed by the petroleum-sharing contract stipulations. The ONGC presently has one contract rig, Discoverer Seven Seas, apart from its own rig, Sagar Vijay. The current crunch in the availability of deep water rigs is a global phenomenon. In spite of restricted availability of drilling rigs, the ONGC is likely to muster two rigs on its own and efforts are on to acquire more. The Government of India has also been requested to issue moratorium on drilling activities.

What are your plans for further exploration and development of the Mahanadi basin? There are reports that you have already struck one trillion cubic feet (TCF) of gas there.

The ONGC is continuing its exploration activities in the Mahanadi offshore basin in the five exploratory, deep water blocks awarded to it by the Government of India on sole risk and/or in consortia under various NELP [New Exploration Licensing Policy] rounds. In addition, it is a minor partner in an onland block.

Its future plans in the Mahanadi basin are essentially guided by the need to consolidate the discoveries by appraisal/delineation drilling and to test the other prospective play types in deep water blocks.

Out of the five deep water blocks, discovery has already been made in blocks MN-OSN-2000/2 and MN-DWN-98/3. Exploratory drilling in the remaining three blocks would be taken up after the integrated evaluation of the G&G data acquired until now. The cumulative range of initial in-place reserve estimate for the two discoveries MDW-2A and MDW-4A is 0.362 to 1.03 TCF. Moreover, based on G&G appraisal, an additional 1.89 TCF in-place reserves is estimated. During the Eleventh Plan, the ONGC plans to drill nine exploratory wells in the Mahanadi offshore basin.

Are you satisfied with the redevelopment of Bombay High? Development geology has contributed a lot to the optimum development of oilfield. Has it become a casualty in the corporate rejuvenation campaign (CRC) of the ONGC?

The Bombay High Field was discovered in 1974 through its first exploratory well, BH-1, which proved hydrocarbon accumulation in L-II reservoir. Subsequent exploratory drilling established the presence of hydrocarbons in L-I, L-II, S1, L-III and basal clastics in addition to fractured basement. The field is divided into two independent blocks, Bombay High North [BHN] and Bombay High South [BHS]. Commercial production from BHN started in May 1976 and from BHS in October 1980. The field has cumulatively produced 377.12 million tonnes of oil until March 31, 2007.

In 1999, the ONGC, with the help of oilfield consultants M/s Gaffney, Cline and Associates (GCA), United Kingdom, took up comprehensive review of the field with the objective of increasing production and recovery factor. Thus the redevelopment projects were formulated and implemented in October 2000 [at BHN] and June 2001 [at BHS]. This was the period when international crude oil prices were much lower compared to what it is today.

Owing to the rise in water-cut and gas-oil ratio, the production level dropped to nearly half the peak level by the end of the 1990s. The redevelopment projects were taken up to control the declining trend and to improve the reservoir performance.

We are fully satisfied with the redevelopment of Bombay High. A feasibility report for BHS redevelopment phase II has been approved. Work is in progress for preparing a similar scheme for BHN. It would be inappropriate to say that development geology became a casualty in the CRC. The multidisciplinary team concept for focussed approach in the development of the fields and delayering of decision tiers is the essence of the CRC. It includes clear definition of the first person responsible. This concept is well embedded in the CRC matrix, where cadre specialisation is blended with team orientation. Development geology continues to play a key role in field development even under the CRC.

Nothing spectacular has been discovered either in the offshore blocks or onland blocks of the Cauvery Basin. This, despite nearly three to four decades of drillings and re-studying the data with the help of Russian experts. Is the ONGCs faith in the Cauvery Basin misplaced?

The ONGC started its exploration activities in the Cauvery onland basin in 1958. The first wild-cat well, Karaikal-1, was drilled in 1965 in the Cauvery onland area. Until 1977, the breakthrough in exploration was elusive in spite of drilling 18 exploratory wells on 12 prospects and obtaining hydrocarbon shows in two prospects namely, Karaikal and Madanam. Exploratory drilling was given a holiday between 1977 and 1984, during which a reassessment of the basin was done.

Exploratory efforts were renewed in 1984 with a string of successes, leading to significant commercial hydrocarbon discoveries notably, at Kovilkalappal, Narimanam, Kuthalam, Kamalapuram, Periyapattinam, Perungulam, Kajirangudi, Thiruvarur, Adiyakkamangalam, Vijayapuram, Bhuvanagiri and Adichapuram.

Exploratory efforts by the ONGC in offshore area led to the discovery of two oil-bearing prospects, PH-9 in 1981 and PY-3 in 1988, and one gas-bearing prospect PY-1 in 1980.

Currently, the corporation operates in eight nomination petroleum exploration licences six onland and two in shallow water and 11 NELP blocks three onland and eight in deep water. The ONGCs interest in pursuing exploration in the Cauvery Basin is evident from the fact that all the NELP blocks offered in the last round were awarded to it. The ONGC has drilled about 450 exploratory wells onland and 57 exploratory wells offshore.

Relentless exploratory efforts in the Cauvery Basin has led to 31 discoveries and has established in-place reserves of 56.44 million tonnes of oil and condensate, and 72.692 billion cubic metres of gas and ultimate reserves of 14.56 million tonnes of oil and condensate, and 34.9 billion cubic metres of gas. Commercial gas production from this basin started in 1988. Twenty-one fields are under production with a rate of 813 tonnes of oil a day and 3.3 million cubic metres of gas. Five locations have been released for exploration in the Adichapuram, Tulsapatnam, Kali and Ramnad areas. In offshore areas, several prospects have been identified. It is necessary to reiterate that the onland and shallow sectors of the Cauvery Basin would continue to provide accretion in hydrocarbon volumes although spectacular breakthroughs are more or less likely to occur in the deep water realm of the basin.

Can you give us an estimate of the success of Sagar Samriddhi? The ONGC has sunk more than $1 billion in the project but many believe that the reserves accreted are only on paper. Even if one notionally considers these reserves as producible, the cost of production and the technology to produce will remain areas of major concern.

The Indian oil and gas industry has realised that easy oil has already been located and future energy resources lie in logistically challenging frontiers such as deep water basins. The ONGC has a strategic goal of establishing 4 billion tonnes of in-place hydrocarbons, of the 6 billion tonnes it is targeting by 2020, from its deep-water blocks. According to the estimates of the Directorate General of Hydrocarbons (DGH), out of the total prognosticated resources of 32 billion tonnes of oil and oil equivalent of gas available in the basins, 11 billion tonnes are locked in the deep waters. Project Sagar Samriddhi was launched in August 2003 for exploration of oil and natural gas in deep water areas. Under the project, the ONGC has drilled 38 wells as on April 1, 2007, of which 26 are in Krishna-Godavari offshore basin, three in Mahanadi offshore, one in Cauvery offshore basin and eight in western offshore basins. Its forays into deep water has been a mixed bag of success and failures. Eight wells drilled along the West Coast have not given encouraging results.

Of the 30 wells drilled on the East Coast, 14 proved to be hydrocarbon-bearing in KG and Mahanadi basins. The discovery during 2006-07 in the ultra-deep water [2,841 m] has been one of the largest discoveries in the eastern offshore. Besides, the ONGC established the presence of hydrocarbons for the first time in the Mahanadi basin.