RIL row apart, oil price plays a spoiler in ONGC’s KG plans
The slide in crude oil prices might push back development of the 98/2 block in the Krishna-Godavari basin, the most ambitious programme of state-run Oil and Natural Gas Corporation (ONGC), by at least two quarters.
ONGC was planning to start gas production here from April 2018. Oil production is slated to begin after that.
“Our programme might be delayed… at the current oil prices, it looks difficult. Our teams are revising the cost and we would have a report by the end of this financial year,” said an official.
In KG 98/2, there are three clusters. In Cluster-1, ONGC is in a dispute with Reliance Industries on migration of gas. Cluster-2 is in the centre and is divided into 2A for gas and 2B for oil. The company is re-working its capital expenditure plan and officials said all the cost optimisation schemes implemented would result in a 10-15 per cent reduction in overall cost and nearly 10 per cent in that of a particular project. “We might see tangible impact on cost reduction in the next two quarters,” the official added.
Read full article: Business Standard
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