ONGC sniffs Bengal gas

New Delhi: ONGC Ltd has struck gas in a well at Ashoknagar in Bengal's North 24 Parganas district. The PSU has also found gas in the Vindhyan basin in Madhya Pradesh.

Both the discoveries will now be assessed for their commercial viability, ONGC director (exploration) Ajay Kumar Dwivedi said on Thursday.

He said one lakh cubic meters per day of gas flowed from one well at Ashoknagar, though its commercial viability would only be known after the tests.

The gas in the Vindhyans is below 3,000 metres. ONGC has drilled four wells after the discovery and will now hydro-frack it by the end of the year to test commerciality.

Dwivedi said the company is on its way to put the Kutch offshore discovery to production, making it India's eighth sedimentary basin. The Cauvery basis was the last to be discovered in 1985.

ONGC had made a significant natural gas discovery in the Gulf of Kutch off the west coast a few months back, which it plans to bring to production in 2-3 years.

The discovery in the Kutch offshore may hold about one trillion cubic feet of gas reserves. The spread of Kutch offshore basin covers an area of 28,000 square kilometers in water depth of up to 200 meters.

Dwivedi, however, said in order to monetise the discoveries in the three new basins, "a favourable fiscal regime and concessions" are needed.

The current gas price of $3.06 per million British thermal unit, is "challenging", he said adding the discoveries are in a tight reservoir, where the cost of production is higher.

ONGC plans to double natural gas production to 50 billion cubic metres (BCM) from 24BCM in the next three to four years. It had previously opened six out of India's seven producing basins for commercial production.

Oil and Natural Gas Corporation Limited (ONGC)