First oil gushes out of ONGC’s deepwater development

India’s government-owned energy giant Oil & Natural Gas Corporation (ONGC) has achieved the first oil from a deepwater block off the coast of the Bay of Bengal, which is believed to be the world’s largest bay water region.

As the first oil flows from the KG-DWN-98/2 Block, ONGC is nearing completion of Phase 2, culminating in the beginning of oil production from the M field. This comes after ONGC executed Phase 1 in March 2020, achieving the start of gas production from the U field of the block in – what the company deems to be – a record time of ten months.

According to the Indian energy giant, the 98/2 project is likely to increase its total oil and gas production by 11% and 15%, respectively. In a bid to overcome technical challenges due to the waxy nature of the crude, which the development of the field faced, ONGC employed a pipe-in-pipe technology said to be a first-of-its-kind initiative in India.

While some subsea hardware involved in this development has been sourced internationally to meet specific requirements, the majority of fabrication works were carried out at a modular fabrication facility at Kattupalli, underlining the Indian player’s commitment to promoting ‘Make in India,’ contributing towards a self-reliant energy sector in the Asian country.

ONGC highlights that the flagship project is on track with the final phase scheduled to be put into production by mid-2024. In November 2023, McDermott was hired on a large transportation and installation contract by ONGC for the KG-DWN-98/2 development project. 

As the peak production of the field is expected to be 45,000 barrels of oil per day (bopd) and over 10 mmscmd of gas, this is anticipated to contribute significantly towards the vision of Narendra Modi, India’s Prime Minister, of an energy Aatmanirbhar Bharat, which translates to ‘self-reliant India.’

In August 2023, ONGC unveiled investment plans for the green shift. To scale up its renewable portfolio to 10 GW by 2030 and turn its low-carbon aspirations into reality, the company intends to invest around ₹1 trillion (about $12.03 billion) by the end of this decade in multiple green initiatives, including renewables, green hydrogen, and green ammonia.

Despite this pivot towards low-carbon and green energy, ONGC is adamant that it will keep oil and gas exploration and production as “the cornerstone of its energy business,” earmarking approximately $1.2 billion per year by 2025 for oil and gas exploration activities.