India needs $ 10 bn for deep water exploration

Feb 18, 1997 01:00 AM

Feb. 8, 1997 India will need $10.0 billion to develop its deep water oil and natural gas reserves, the chairman of state-run Oil and Natural Gas Corporation (ONGC) says. "Based on estimates, the exploration programme and development of identified structures may cost approximately $ 10.0 billion," ONGC chairman Bikash Bora told a seminar on deep water oil and gas exploration. India could tap between 5 - 9 billion tonnes of oil and oil-equivalent gas reserves, Bora said. He said ONGC had worked out the cost of developing economic field size ranging from 50 to 200 million barrels at water depths of 200 to 600 metres. "Considering the cost of oil at $20 per barrel, the rate of returns fall in the range of 19 to 30 %, suggesting that deep water exploration programme is very much viable and commercially attractive," he said. He added that ONGC looked forward to oil firms from the US, Britain, Norway and Brazil to contribute to development of India's deep water hydrocarbon resources. Between 20 to 35 % of hydrocarbon potential in India is expected to be in deep waters beyond 200 metres.
ONGC, which accounts for almost 90 % of India's oil and gas production, has taken up four locations for drilling, covering about 1.4 million square metres in the Arabian Sea and the Bay of Bengal. ONGC has been increasingly looking to deep waters as India's indigenous oil production has been stagnating around 30 million tonnes a year and domestic demand growing by about 8 %. Local crude accounts for less than half of India's petroleum product requirements.

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