BG Group to Invest $800mn in Panna-Mukta/Tapti Fields

BG Group has proposed an investment of over $800 million over the next two years in development of Panna-Mukta and Tapti offshore fields to improve production. About $145 million is to be earmarked for the Panna-Mukta fields and around $659.5 million for the development of Tapti gas field.

The investment in Panna-Mukta field would result in an incremental oil production of 18.5 million barrels and 2.15 billion cubic meters of gas. For the Tapti field, incremental gas production is estimated to be around 10-12 million standard cubic meters per day (mmscmd).

Natural gas production from Panna-Mukta will increase to 2.67 mmscmd in 2004-05 and to 2.88 mmscmd in 2005-06 from current year estimate of 2.61 mmscmd. Tapti gas production would jump from 5.24 mmsmcd (2003-04) to 8.07 mmscmd in 2004-05 and 11.78 mmscmd in 2005-06. For 10 years, beginning 2007-08, Panna-Mukta would have additional gas production of 2 mmscmd and Tapti of 3 mmscmd.

The investment would result in 0.2 million tons additional crude oil production from Panna-Mukta fields in 2004-05 and 2005-06 over current year estimate of 1.2 million tons. The incremental production from Panna-Mukta would be 0.4 million tons in the subsequent years.

BG has 30% stake in the fields; ONGC holds a 40% stake and Reliance Industries holds the 20%.

Of the total investment of $804.5 million, BG's share of the investment would be around $241.35 million and the remaining 70 percent would be contributed ONGC and RIL.

The development plan has to be approved by the Management Committee (MC). The MC comprises representatives from the consortium as well as from the government which is represented by the Directorate General of Hydrocarbons (DGH).