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State-owned Oil and Natural Gas Corporation (ONGC) has once again failed to attract bids for a partnership in the Deen Dayal gas field located in the KG basin of the Bay of Bengal, marking a disappointing third attempt in five years. The recent tender, which sought expressions of interest from global oil and gas companies with the necessary technical expertise and financial capacity, closed on September 12 without any bids, according to sources familiar with the situation.
The Deen Dayal field, which ONGC acquired from the Gujarat State Petroleum Corporation (GSPC) in January 2017 for approximately $1.2 billion, has produced negligible gas since the acquisition. Initially touted to have significant potential, the fields in-place gas reserves were later revised downwards from an estimated 20 trillion cubic feet to around 2 trillion cubic feet, making it more challenging to develop than anticipated.
To date, ONGC has drilled seven development wells in the field, but four of these did not yield expected productivity. Technical complications led to the abandonment of the remaining three wells during drilling and completion phases. ONGCs tender document emphasized the need for a global partner to assist in developing the Deen Dayal West (DDW) gas/condensate field, which was discovered nearly two decades ago by GSPC.
Despite its high-profile acquisition, ONGC has faced ongoing difficulties in bringing the field to production, incurring substantial costs beyond the initial purchase price. GSPC retains a 10% stake in the field, while Jubilant Enpro holds the remainder. The KG-OSN-2001/3 block encompasses several fields, with the DDW field spanning 37.5 square kilometers and located approximately 10 km off the Andhra Pradesh coast.
ONGC is now considering a revision of the previously submitted field development plan, with intentions to leverage the existing infrastructure for potential future production. The company had initially reasoned that it could utilize facilities such as the processing platform and subsea pipeline to support discoveries in neighboring blocks, but it opted to construct new facilities instead.
With no bids received and persistent challenges, ONGCs efforts to revive the Deen Dayal gas field continue to encounter obstacles, raising questions about the future viability of this strategic asset. |
