After investing nearly $1.2 billion and spending seven years with limited success, Oil and Natural Gas Corporation (ONGC) is now seeking partners to aid in the development of the Deen Dayal gas field in the Krishna Godavari (KG) basin in the Bay of Bengal. ONGC has issued a call for expressions of interest from global oil and gas companies with the necessary technical expertise and financial capacity to join as partners, aiming to devise a viable strategy for the field’s development.
The Deen Dayal field, situated in the KG-OSN-2001/3 block off India’s east coast, was acquired by ONGC from Gujarat State Petroleum Corporation (GSPC) in January 2017. GSPC, which retains a 10% stake, originally marketed the field as a promising asset when selling its 80% interest to ONGC to alleviate its debt. Despite early projections that the field held up to 20 trillion cubic feet of in-place gas reserves, these estimates were later drastically reduced to just one-tenth of the initial figure.
Since the acquisition, the field has produced negligible quantities of gas. The venture has faced numerous technical challenges, resulting in suboptimal performance. According to the tender document released by ONGC on June 12, out of seven development wells drilled, only four were completed, and none yielded the expected productivity. The other three wells encountered severe technical difficulties during the drilling and completion phases and had to be abandoned.
In addition to the acquisition cost, ONGC has incurred significant, undisclosed expenses attempting to bring the Deen Dayal West (DDW) field to production. The state-owned company is now looking for a global partner capable of overcoming the technical hurdles and enhancing the field’s productivity.
Jubilant Enpro holds the remaining stake in the field. ONGC’s quest for a partner underscores the complexity and high stakes involved in deep-sea hydrocarbon exploration and production, particularly in challenging environments like the KG basin. The success of this partnership could potentially unlock substantial gas reserves, contributing significantly to India’s energy landscape.
