SP Energy confirms first oil from FPSO deployed at deepwater project off India

India’s Shapoorji Pallonji Energy (SP Energy), a wholly-owned subsidiary of Shapoorji Pallonji, is enthusiastic about the first oil from a floating production, storage, and offloading (FPSO) vessel, which is working for Oil & Natural Gas Corporation (ONGC) at what is said to be the government-owned energy giant’s first deepwater development located off India’s east coast.

The FPSO Armada Sterling V, which achieved its first oil on January 7, 2024, at KG-DWN-98/2 deepwater block offshore Kakinada, is owned by a joint venture encompassing SP Energy (70%) and Malaysia’s Bumi Armada (30%). This is Shapoorji Pallonji’s fourth FPSO in total and its third one for Indian waters.

With a processing capacity of about 60,000 bpd of liquid and 3 mmscmd of gas, the FPSO is designed to operate in the cyclone-prone eastern offshore region of India and developed considering the highest safety standards. According to the Indian player, the KG-DWN-98/2 field is ONGC’s first deepwater development while this project represents “the largest floating installation in the Indian subcontinent.”

Ravi Shankar Srinivasan, Director & CEO – SP Energy, commented: “Congratulations and thanks to every stakeholder involved in the Armada Sterling V, a deepwater FPSO project, in enabling SP Energy to achieve this commendable milestone of first oil.”

Furthermore, SP Energy claims that this project underscores India’s high-end technical proficiency, as it was designed, engineered, and delivered by an Indian team of engineers and managers and its operations would be undertaken entirely by an Indian crew.

“This positions SP Energy among the world’s leading FPSO solution providers, showing that it can undertake large FPSO projects that are required in various parts of the world, including South America and West Africa,” highlighted the Indian player.

Following the FPSO Armada Sterling V’s first oil at the Block KG-DWN 98/2 development project on the east coast of Kakinada offshore India, Bumi Armada explains that the vessel will begin the necessary acceptance tests to achieve the final acceptance, which is required for the charter to start. ONGC believes that the 98/2 project will increase its total oil and gas production by 11% and 15%, respectively.

As the peak production of the field is expected to be 45,000 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.’

ONGC has earmarked approximately $1.2 billion per year by 2025 for oil and gas exploration activities and about ₹1 trillion (about $12.03 billion) in total by 2030 for multiple green initiatives.