India’s Oil and Natural Gas Corporation (ONGC) produced first oil from its flagship deepwater KG-DWN-98/2 block in the Bay of Bengal’s Krishna Godavari basin on 7 January, a project the government projects will boost India’s domestic oil production by 11% and gas production by 15%.
With the announcement of first oil from KG-DWN-98/2’s “M” field, ONGC, signals it is nearing completion of Phase 2 of the project off the country’s east coast.
In a final phase, ONGC aims to put the project’s remaining oil and gas fields on stream to achieve production of 45,000 BOPD and over 10 million m3/D of gas by May or June 2024, India’s Oil and Gas Minister Hardeep Singh Puri noted in a statement aired by Asia News International and posted on YouTube.
He said in a video statement, “ … out of the 26 wells there, four wells are already operational,” adding that the May–June production targets represent a 7% increase to India’s current production of both oil and gas respectively.
ONGC executed Phase 1 of the project in March 2020, having brought natural gas on stream from the U field of the KG-DWN-98/2 Block in a record time of 10 months after COVID-19-pandemic-related delays, the project operator said.
ONGC Pioneers “Pipe-in-Pipe” Technology to Cope With Waxy Crude
Located in the Godavari River Delta 35 km offshore in water depths ranging from 300 to 3200 m, the project has faced field development challenges due to the waxy nature of the crude.
In a news release, ONGC said it overcame this and other challenges by using an innovative “pipe-in-pipe” technology, a first for India.
While some subsea hardware was sourced internationally to meet specific requirements, most fabrication works were carried out at India’s Modular Fabrication Facility in Kattupalli, ONGC said.
Joint venture partners, India’s Shapoorji Pallonji Oil & Gas (70%) and Malaysia’s Bumi Armada (30%), own the Armada Sterling V FPSO which was built at the Sembcorp Shipyard in Singapore and hooked up in the waning days of December offshore Kakinada.
India’s largest FPSO, Armada Sterling V is designed to weather super-cyclones; it also has the largest submersible turret system and is the first to use low-NOx power solutions in India, according to Shapoorji Pallonji’s website.
Prime Minister Narendra Modi hailed the first oil announcement as significant to achieving “Atmanirbhar Bharat,” the Indian government’s economic-growth initiative which from Hindi translates to English as self-reliant India.
“This is a huge step,” Narendra Taneja, chairman of the Independent Energy Policy Institute, a New Delhi-based think tank, told ANI, adding that production off Kakinada in the Krishna Godavari basin could in the future reach 75,000 B/D.
The International Energy Agency (IEA) predicts that India will make up the biggest share of energy demand growth at 25% over the next 20 years, as it is destined to overtake the EU as the world's third-biggest energy consumer by 2030.
India Turns to Russia
India's oil demand is projected to rise to 8.7 million B/D in 2040 from about 5 million B/D in 2019, the IEA has said, while predicting its refining capacity will reach 6.4 million B/D by 2030 and 7.7 million B/D by 2040, from 5 million B/D.
India currently imports 76% of its crude oil and is the globe’s No. 2 net oil importer after China, according to the IEA, which predicts India’s oil imports could hit 90% by 2030 and 92% by 2040.
Russia supplied 40% of the oil that India imported between January and September 2023, according to Indian Trade Ministry data. Iraq follows Russia at 20%, Saudi Arabia (15%), by other Middle East producers (11%), Africa (5%), and Latin America (4%), ministry trade data showed.
