ONGC Unlocks Oil, Gas in Ultra-Deepwater KG Basin

MUMBAI (Dow Jones Newswires), Apr. 2, 2009

Oil & Natural Gas Corp. has discovered oil and gas in its ultra-deepwater block off the east coast of India, three senior executives at India's biggest oil and gas explorer said Thursday.

"The discovery is in the YS 5 well and has both oil and gas," an ONGC executive, who didn't wish to be named, told Dow Jones Newswires.

The discovery is in the KG-DWN-98/2 block, in the Krishna Godavari basin, and the board will be informed Thursday afternoon when it meets, a second ONGC executive said. Neither executive provided details such as flow rate or size of the discovery, but both said that it could be "substantial."

A third ONGC executive said that the discovery was in a "shallow" region of the block. He declined to elaborate.

"We have to first inform the board and stock exchanges and only then can I share information," he said.

A spokesman at the state-owned company wasn't available for comment.

ONGC had announced an oil discovery in the same area in November, at a water depth of 225 meters in well G-4-6, at Block IG, offshore the eastern state of Andhra Pradesh.

ONGC said in September that it will invest $5.3 billion to develop gas finds in two of its eastern offshore Krishna Godavari basin blocks to produce 25 million standard cubic meters per day of gas by 2013.

These blocks are located next to Reliance Industries Ltd.'s KG-DWN-98/3 or D6 block, where the company began production of natural gas earlier Wednesday.

Shares of ONGC rose 5.7% to INR845 at 0853 GMT on the Bombay Stock Exchange, compared with the benchmark index's 5.1% rise.  

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