A unique and lucrative basin

Print edition : January 31, 2003

The Krishna-Godavari basin, with a very high production potential, is one of ONGC's premier basins in the country today.

FISH-BREEDING is a big-time activity in Matsyapuri, situated near the village of Vempa, about 16 km from Narasapur in East Godavari district of Andhra Pradesh. But at Matsyapuri-2, the Oil and Natural Gas Corporation's site in a verdant setting here that is a part of the Krishna-Godavari (K.G.) basin, men in orange overalls are engaged in a different kind of activity - looking for hydrocarbons. On this particular evening, they have just completed a round of drilling activity and are waiting for the results of the "production-testing".

The drilling here began on September 15, 2002, on which day the well was "spudded''. It took the rig-workers 56 days to reach the targeted depth of 3,205 metres (3.2 km).

As a Frontline team got on to the rig, M. Mohan Kumar, Deputy Superintending Engineer (drilling), explained how drilling this particular well had demanded special skills. A "deviated well", it did not go down vertically and was drilled in an "S" shape.

The official declined to hazard a guess on the results of the production-testing procedure that had just been completed. A massive blow-out preventer had been installed at the well-head.

THE K.G. basin is one of ONGC's premier basins. It spans across the coastal districts of East Godavari, West Godavari and Krishna in Andhra Pradesh. Uniquely here, oil and gas have been found in all formations - from the oldest Mandapeta sandstone sediment of the Permo-Triassic age, which is 250 million years old, to the youngest Godavari clay of the Miopliocene age, which is five million years old.

The Krishna-Godavari and Cauvery basins are testimonies to ONGC's perseverance. Its efforts have paid rich dividends, though initially, the production of oil and gas was not enough to meet the cost of exploration and development.

The K.G. basin extends over 28,000 sq km onland, 24,000 sq km in "shallow'' (by current definition, a depth of up to 400 metres) waters offshore and 18,000 sq km in deep waters (a depth of up to 2,000 metres). ONGC began prospecting for oil and gas in the basin in April 1977. It drilled its first well near Narasapur in 1978 and discovered gas there. Since then it has made many such finds in the basin. It now prospects for hydrocarbons both in shallow and deep waters, besides for oil and gas, both onland and offshore. It has set up a mini-refinery at Tatipaka, which can distil about 1,500 to 2,000 barrels of crude oil a day into naphtha, high-speed diesel, SKO (superior kerosene oil) and LSHS (low sulphur high stock). It is a skid-mounted, relocatable refinery.

The basin's base complex has moved to an 88-hectare area about 6 km from Rajahmundry town in East Godavari district. The complex has not only administrative offices but a higher secondary school, about 250 staff quarters, an 18-hole golf course, a football field, a cricket ground, a skating-rink, a children's park, a vocational education centre for women, and so on.

According to C. Lal, Additional Executive Director - Asset Manager, K.G. basin, the basin is one of the `high-performing assets' of ONGC. In the last five years, oil production went up four-fold and gas sales doubled. Crude oil production was 2,000 tonnes a year and gas production 14 million cubic metres a year when production began in 1986-87. "Today, we produce 850 tonnes of oil a day and sell 5.5 million cubic metres of gas a day,'' Lal said. In 2001-02 alone, the K.G. basin accounted for 2.82 lakh tonnes of oil and sold 1.769 billion cubic metres of gas. The cumulative royalty that ONGC has so far paid to the Andhra Pradesh government adds up to Rs.550 crores, including Rs.300 crores paid in the last three to four years.

According to Lal, there are 30 onland and 30 offshore wells. There are 112 onland wells and 11 offshore wells which produce gas. A major find was Ravva offshore, in 1987, where crude oil is now produced in a joint venture. So far 460 wells have been drilled; these include 354 onland and 106 offshore. The offshore wells include 30 wells drilled in the Ravva offshore structure. Eight rigs are now prospecting for oil/gas onland, and one rig each in shallow and deep waters.

There are 16 production installations in the basin. The main production areas for oil and gas onland are Lingala, Kaikaluru, Kesanapalli, Tatipaka, Pasarlapudi, Mandepeta, Adavipalem, Lakshmaneswaram, Ponnamanda, Endamuru and Mori. In financial year 2002-03, nine wells have been put into production: one oilwell and eight gas wells. These account for 55 tonnes of oil and four lakh cubic metres of gas a day. Gas flaring in the basin is less than one per cent, which is the lowest rate in the country. Two small offshore fields, GS-15-4 and GS-23-1, were recently put into production. The Andhra Pradesh State Electricity Board, GVK Industries, Lanco-Kondapalli, Nagarjuna Fertilisers and Chemicals Limited, and Spectrum Power Generation Limited use ONGC's gas as fuel.

S.S. Yalamarty, General Manager-Basin Manager, K.G. basin, said that the basin was a "geologically challenging and professionally demanding'' one. Despite the complexity involved, ONGC was making more and more finds in the basin. Yalamarty, who is a geologist, says that the K.G. basin has unique geological features. First, as the basin has the oldest to the youngest sediments, its geographical distribution was very wide. Consequently, ONGC's resource distribution was widespread. Secondly, the basin extended from onland to offshore in a single unit. "So I cannot deal with the offshore part without understanding what is happening onland,'' Yalamarty said.

Thanks to ONGC's expertise, wells GS-49-1 and Kesanapalli West 8, 10,16 and 17 were drilled successfully from an onland location towards very shallow waters. Thirdly, an unusual and challenging phenomenon was encountered in which the hydrocarbons were found in dispersed cavities. Besides, there were unconventional reservoirs such as volcanic rocks (basalt) in Razole and Mummidivaram, and a limestone reservoir in Kaikalur-3. Yalamarty said: "The current understanding is that there is more gas accumulation onland and more liquid hydrocarbon accumulation offshore."

In the basin, ONGC has two onland blocks, six shallow water blocks and six deep-water blocks for which it has the exploration licence. In addition, there is one onland and one offshore block that are being operated by private companies under a production-sharing contract with the Government of India.

A peculiar characteristic of the K.G. basin was that 90 per cent of its production came from exploratory wells. Convention demanded drilling of a few exploratory wells, preparing a development plan and drilling of more wells for production if hydrocarbons were found. "But here, because of its geological complexity, each well is an exploratory well and is considered an individual entity," Yalamarty said. While for wells globally the average success ratio was 1:6 and upwards, in the K.G. basin it was 1:2.5 despite the complexity involved.

Oil production in the basin has gone up by an order of 10 in the last 10 years - from 0.03 million tonnes to 0.29 million tonnes a year. So far ONGC has produced one million tonnes of oil and about 11 billion cubic metres of gas here. This is apart from the production of hydrocarbons from Ravva.

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