ONGC frames strategy for higher output growth

New Delhi: Oil and Natural Gas Corp (ONGC), India's largest vertically integrated oil company, is looking at production enhancement contracts (PECs) and enhanced oil recovery techniques to boost oil and gas output from old and matured fields that are faced with natural decline, its chairman Shashi Shanker said.

The company plans to bring in service providers with advanced technology in operation of its oil and gas fields by offering them a PEC where they would get a pre-determined fee for incremental production over a baseline.

Field operators would be selected through a competitive bidding process where those offering higher growth in output would be chosen, he said. Under the PEC, the service provider will also be responsible for maintaining Base Production Profile for which fees will be paid.

Shanker said the service providers are required to bid incremental production profile and also maintenance profile for base oil production. They shall also provide the FDP (Field Development Plan) for the fields. Concurrently, the company has already initiated major enhanced oil recovery (EOR) activities in order to enhance the recovery of oil from the matured fields.

"In Cambay and Cauvery basins, unique EOR projects called Carbon Capture, Utilisation and Storage (CCUS) have been planned," he said. The EOR model through CCUS will not only help increase production but also provide impetus to environmental management to a great extent.

"These initiatives -- PEC and EOR -- have been taken up with an objective to bring in new technology infusion for increasing production particularly from the matured fields which are faced with the sharp natural decline," he said. "ONGC is leaving no stone unturned to increase the production in line with the clarion call given by the Prime Minister for 10 per cent import reduction."

Under the PEC Business Model, the contract will remain valid for 20 years and the service providers will have to take care of entire capital and operational expenditures related to the fields to meet the committed production. ONGC, he said, has already identified two onshore fields -- Kalol under Ahmedabad Asset and Geleki under Assam Asset for implementation of PEC model.

The baseline production profile under business as usual (BAU) prospect, has already been mapped by ONGC considering prevailing field conditions and routine operations which shall be binding on the service providers. ONGC has also got the baseline production profile vetted by the third party, he said.

The company has seen almost flat growth in crude oil production in the last five years. It stood at 22.31 million tonne in 2017-18. Gas production at 23.48 billion cubic metres was higher than 22.09 bcm of 2017-18. PECs, to begin with, will be implemented in onshore fields.

ONGC's onshore crude oil production increased 2 per cent to 6.064 million tonne (MT) for 2017-18 as compared to the previous fiscal. Its natural gas production from onshore fields rose 8 per cent to 6 billion cubic metres (BCM) last fiscal. Key features of the P

EC are that the service providers shall bring comprehensive technologies to improve production at their cost whereas the ownership of the fields shall remain with ONGC, he said. EC model is being followed worldwide by various E&P industries to enhance production from matured oil fields.