BG Gets Approval for PMT Development

Oilfield service contractors will be happy to hear that the oil ministry has at last approved a $190 million development plan by operator British Gas for the Panna and Mukta oilfields.

PETROWATCH learns approval came during a Management Committee meeting of the Panna, Mukta and Tapti consortium on October 8th. Final oil ministry approval was needed before contracts could be awarded because, "costs had gone up by about 50% from the original proposal." BG can now award contracts for this project.

Under this 'Extended Plan of Development' at Panna and Mukta, two platforms (PH and PA) will be installed within the next year and a half.

This will take to nine the total number of platforms at Panna, Mukta and Tapti. Five wells will be drilled from each of these two new platforms to produce an additional 20m barrels of crude oil. Panna and Mukta currently produce about 26,000 b/d.

Another important success for BG at the October 8th MC meeting was approval to drill more infill wells at Panna and Mukta. BG planned to drill 18 infill wells, but the ministry had approved only seven. The rest were 'contingent' wells.

Approval has now been given for 14 infill wells and studies will be conducted before approving the remaining four. But BG failed to get oil ministry approval for a two-month-old proposal to increase the Panna gas production ceiling rate from the present 100m cubic feet per day to 140m cf/d.

We learn BG wanted to increase production initially for a six-month period when the performance of the field could be "carefully monitored". Instead, BG has been asked to submit to the DGH a list of more 'normal' wells with low gas-to-oil ratio. "During the MC meeting eight such wells were identified," we are told. Once BG submits the list of additional wells the DGH will analyze the data and take a decision on allowing increased gas production. Present gas production from PMT is 130m cf/d.

The Panna-Mukta-Tapti consortium is made up of ONGC (40%), British Gas and Reliance (each 30%). After earlier operator Enron quit about a couple of years ago, ONGC refused to allow BG to take over as sole operator and instead compelled it to accept joint operatorship of the fields. Presently, the PMT consortium is in dispute with GAIL over a proposal to raise the price of Tapti gas by 150%.

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