Expansion Set for Panna Field Offshore India

BG India announced that, with partners, Oil and Natural Gas Corporation and Reliance Industries Limited, US$140 million is to be invested in the Panna oil and gas field, offshore Mumbai, to target new reserves and expand current production.

The development plan comprises construction and installation of two new wellhead platforms and associated infield pipelines to connect to the existing processing and compression platform. The drilling schedule, to begin in the second quarter of 2005, includes six horizontal wells from one platform and five horizontal wells from the other.

Implementation of the expansion program is expected to result in gross incremental recovery of 18 million barrels of oil and 74 billion cubic feet of gas. First production is expected in the third quarter of 2005.

Nigel Shaw, CEO, BG India, said: "BG India and partners are proceeding with investment plans to target undeveloped areas of the Panna Field. By applying advanced drilling techniques to extract oil and gas from the field's complex reservoir and, with gas rate management, the consortium will be able to access and develop economic reserves to realize the full potential of the field."

The two new platforms are being designed to allow future infill drilling to maximize the field's full potential. Contract awards for the new facilities are scheduled to be made in April this year.

The Panna/Mukta and Tapti fields' enhancement project, announced in September 2003, is under way. The Ensco-50 rig arrived on location in the Tapti field in mid-February and is currently drilling four re-completion wells before it moves to the Panna Field to drill seven infill wells in May 2004.

The offshore Panna Field lies approximately 95 kilometers north west of Mumbai in water depths of 45 to 70 meters. It is estimated to have original oil in place of one billion barrels and original gas in place of 1.8 trillion cubic feet.

The field is part of the Panna/Mukta and Tapti Concessions, of which, BG India holds 30 per cent interests. Oil and Natural Gas Corporation Limited holds a 40 per cent shareholding while the remaining shareholding is owned by Reliance Industries Limited.

Current production from the Panna/Mukta and Tapti fields contribute to about seven per cent of India's total oil and gas production.