ONGC Reports Five May Discoveries

On Thursday the board of Oil & Natural Gas Corp. Ltd (ONGC) announced that the company made a record five discoveries in May 2007. Details about the discoveries follow:

MDW-4A Well in Mahanadi Basin

ONGC made a second discovery in Mahanadi Basin, located in the MN-DWN-98/3 block off the East Coast of India about 60 km off Paradeep. The MDW-4A well, at a water depth of 1087 meters, produced gas with a high flow potential, through straddle packer from a depth of around 1800 meters within Mio-Pliocene formation. The block has been bid by ONGC exclusively without any partners under NELP-I. ONGC has drilled 5 Wells in Mahanadi Basin and made the first discovery in 2006.

Disangmukh-3 discovery in Sibsagar

Disangmukh-3 well, spudded on December 24, 2006, in Sibsagar District PEL (Nomination Block), in Assam & Assam Arakan Basin produced oil @1421 barrels/day through 6 mm bean from a depth of 3688-3677 m. The flow rate of oil is highest among the discoveries in North East. Oil is of very good quality sweet crude with API gravity of 33 and pour point 30 degrees C. Disangmukh structure is situated at a distance of 8 km north of Rudrasagar field close to Brahamputra river.

Disangmukh is the first prospect probed by ONGC in the Assam Shelf way back in 1959, which gave positive indications.

Panidihing-6 discovery near Brahmaputra River

New oil prospects have been found in well Panidihing-6 in Assam & Assam Arakan Basin and the well produced oil @ 516 barrels /day with 5mm bean from a depth of 4256-4258 m. The Panidihing prospect is located near Brahmaputra River about 27 kms to the north of Nazira town. This well is the second producing well over Panidihing prospect.

This is a very significant discovery after Disangmukh-3 well as both of these prospects are producing from the same formation i.e. Tura formation from different areas indicating a new deeper play with significant production potential in this area. It opens up new prospects in North Assam Shelf for further exploration in other areas of Lakwa - Lakhmani, Rudrasagar where similar prospects are buried in deeper depths.

Kunjaban-2 discovery in North Agartala

Gas has been discovered for the first time in the North Agartala PEL nomination block in Tripura and the well Kunjaban-2 (KUAC), spudded on December 19, 2006, produced gas @100,000 m3/d through 6 mm bean from a depth of 2687-2682 m. Further testing is in progress and potential of the field is being assessed. The present discovery at Kunjaban is a new prospect located North of Agartala Dome. This discovery will add to the tally of gas fields in Tripura and help in meeting additional gas requirements for the planned Tripura Power Project.

Uppidi-1discovery in KG Basin

Uppidi-1 (UPAA) well, spudded on March 21, 2007, in PEL Block-1B (Pre-NELP) in KG basin produced gas @99,840 m3/d and condensate @ 91 barrels/day through 6 mm bean from a depth of 2167-2163 m. This is again a new discovery and potential of the field is being assessed.

ONGC also announced the May 31, 2007, completion of the Mumbai High South Redevelopment Project--19 months ahead of schedule. The project commenced on October 16, 2001, and was scheduled to conclude in December 2008.

The project envisages incremental production of oil and gas with an investment of around Rs 6,500 crores. It includes installation of 10 new well platforms, laying of new pipelines, and upgrading existing facilities—in addition to drilling 140 new wells.

ONGC has also reached an agreement with Petrobras to exchange interests of offshore blocks in India and Brazil.

ONGC has signed an Heads of Agreement with Petroleo Brasileiro S.A. (Petrobras) for swapping of interests in offshore blocks in India and Brazil. The Agreement was signed by Chairman, ONGC Group of Companies, Mr. R.S. Sharma, and the President of Board of Directors of Petrobras, Mr. Jose Sergio Gabrielli De Azevedo in the presence of Honorable Prime Minister of India, Dr. Manmohan Singh and the visiting Brazilian President H.E. Luiz Inacio Lula da Silva, on June 4, 2007, at the Hyderabad House in New Delhi.

Petrobras, ONGC and OVL have entered into a Heads of Agreement (HOA) under the MOU signed in September 2006. The Heads of Agreement establishes the basic terms and conditions for assignment of 25% Participating Interest each in the Blocks BM-SEAL-4, BM-S-17 and BM-BAR-1 in Brazil by Petrobras to OVL and assignment of 15%, 40% and 25% Participating Interest in Blocks KG-DWN-98/2, MN-DWN-98/3 and CY-DWN-2001/1 respectively in India by ONGC to Petrobras.

R.S. Sharma, Chairman and Managing Director of ONGC, said after the board meeting that these discoveries are very significant for ONGC because they have taken place in new formations, possibly leading to many more exploration prospects in the near future.

ONGC's board also approved investments in the development of B-Cluster marginal gas fields (B-46, B-48, B-105 & B-188), located in the northwest of the Mumbai High field off India's west coast. The total cost of the project is approximately Rs. 1285 Crore with a Foreign Exchange component of approximately Rs 1240 Crore. These fields together hold in-place gas volume of 11.298 BCM in probable category as on April 2007.

After development the fields with produce 1.636 MMSCMD of gas and 2890 bpd of Condensate. The envisaged cumulative gas & condensate production is of the order of 5.273 BCM and 1,684 MMm3 respectively over a period of 12 years.

As the fields are close to Mumbai High filed, the production facilities of Mumbai High North will be utilized thus minimizing the development cost. The project will be completed by April 2010, to match the commissioning of MHN Complex.

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