Indian giant plans to invest $4 bln to step up its exploration game

India’s government-owned Oil & Natural Gas Corporation (ONGC) intends to invest up to $4 billion over the next three years as part of its strategy to boost exploration activities.

ONGC informed on Friday that it had held a board meeting on Thursday, 26 May 2022 to firm up its future exploration strategy, drawing up a comprehensive roadmap to further intensify its exploration campaign. To pursue the realization of this roadmap, the firm allocated capital expenditure of about Rs.31,000 crore or almost $4 billion in the next three fiscal years during 2022-25.

According to the Indian player, this is 150 per cent of its exploration expenditure of Rs. 20,670 crore (around $2.7 billion) in the last three fiscal years during 2019-22. To achieve this, ONGC plans to leverage international collaborations with “reputed global majors,” adding that talks are already in an advanced stage.

To this end, the company inked a Memorandum of Understanding (MoU) with Equinor in late April 2022, allowing the Norwegian state-owned giant to gain access to the Indian energy market by participating in several projects, including renewables and carbon capture utilisation and storage (CCS).

ONGC explains that its new roadmap for exploration intensification includes activities funded through its internal programme as well as funded and facilitated by the government.

Furthermore, the company elaborates that the government-funded programme for appraisal of unapprised offshore areas in the Exclusive Economic Zone (EEZ) will be carried out in three sectors – West Coast of India, East Coast of India, and Andaman offshore – and includes 70,000 line kilometres (LKM) of state-of-the-art 2D broadband seismic data acquisition, processing and interpretation (API). The firm confirmed that it will complete the technical bid opening (TBO) for seismic data acquisition by June 2022.

Currently, ONGC holds two blocks for exploration under the Open Acreage Licensing policy (OALP) in Andaman Basin while the Indian government has also acquired seismic data in some sectors within ‘No-Go’ areas and few prospects are already identified. The company has plans to drill six wells in the next three years. Two of these will be done under ONGC committed work program and four through government funding. The Indian giant also says that reputed global companies/consultants are being invited for the assessment of this basin for future exploration and exploitation plans.

Moreover, ONGC’s internal programme has three components: re-exploration of mature basins, consolidation of emerging ones, and probing of emerging and new basins. The Indian company states that it is trying to probe around 1,700 million tonne of oil and oil equivalent gas (MMTOE) of yet-to-find (YTF) reserves during 2022-25 under this internal programme.

The firm’s activities within this programme include 2D and 3D seismic surveys, followed by drilling of around 115-120 wells with an estimated outlay of Rs. 10,000 crore or about $1.3 billion every year for the next three years.

In addition, the company says that its government’s facilitation has resulted in the release of about 96,000 sq. km area so far, which was earlier demarcated as a ‘no-go’ zone. ONGC believes that this will further help it to complete its acreage acquisition programme of bringing around 5,00,000 sq. km under active exploration by 2025.

When it comes to ONGC’s most recent deals, it is worth reminding that the Indian player awarded a three-year contract to Shelf Drilling earlier this month for operations in Mumbai High, offshore India.