Buoyed by six discoveries last year, India's state-owned exploration major Oil and Natural Gas Corporation (ONGC) is targeting a 20 percent increase in domestic oil production by 2007.
Accounting for 80 percent of India's annual domestic production of around 33 million tonnes, ONGC sees the current high crude prices as being favourable for production of oil and gas from marginal fields.
"In view of the current high prices of crude, there is a strong case to step up exploration and production in discovered fields that were not economic for production earlier. We are now monitising these fields," said Subir Raha, ONGC's chairman and managing director.
ONGC, which Wednesday announced a net profit of Rs.86.64 billion for fiscal 2003-04 at its annual shareholders meeting, is hoping to boost production to 29 million tonnes by 2007.
"The net profit could have been improved but for the subsidy paid to oil marketing companies by way of discounts in prices of crude oil and petroleum products amounting to Rs.26.9 billion," Raha told a news conference.
ONGC has been able to raise its oil production from 24.7 million tonnes in 2001-02 to 26.07 million tonnes in 2003-04 through improved recovery.
By the end of the plan period 2002-07, ONGC is hopeful of achieving its objective of a 20 percent increase in its domestic production.
The company plans to give many among its 93 marginal fields for service contracts. So far six marginal fields have been given on service contracts while 19 are to be allotted by the year end, said Raha.
ONGC also plans to raise production through modernisation and improved recovery by investing Rs.120 billion in 15 projects.
"We plan an investment of Rs.188.14 billion during the current fiscal for exploration and production activities in offshore and onshore blocks," said Raha.
ONGC made six oil and gas discoveries during 2003-04. Of these, two are in Assam, one in Chinama Tibba in Rajasthan, two in Andhra Pradesh, one in the Cavery basin onshore and one offshore at Godavari-G4, said Raha.
"In Assam, one of the newly discovered blocks is already under production yielding 300 barrels a day. In Rajasthan, where we have discovered sweet gas, seismic surveys are on for undertaking development," he said.
"In the other blocks too we are working on our development plans.
"In the case of the offshore G4 well, we are looking at adjoining blocks and propose an open development plan. Currently we are studying the block and are yet to do tendering for development."
Of the four wells drilled offshore, ONGC faced disappointment in three wells and only G4 "is a commercially viable discovery", Raha admitted.
Import dependent India has stepped up exploration and development activities in the last few years with some encouraging discoveries. Experts, however, admit India is unlikely ever to bridge its growing gap between demand and supply of oil and gas.
In fact, despite new discoveries, gas supplies in the country have been on the decline due to lower production by ONGC.
Source: Indo-Asian News Service