Gene Kliewer
Technology Editor, Subsea & Seismic
Production of natural gas from the deepwater Krishna-Godavari (K-G) basin offshore eastern India is expected to give the country’s upstream activity a boost after years of tepid operations.
With about 75% of its hydrocarbon energy supplies coming from imports and in the face of growing economy, the 50% run up in gas output from K-G is sure to be welcomed. An economic look ahead prepared for the government predicts growth reaching for double figures this year. Along with that will come yet higher energy demand.
The same 2009-2010 study counted 15 new oil and gas discoveries and anticipates growth after five years of flat production around 34 million metric tons (37.5 tons) of crude and 32 bcm (1.1 tcf) of natural gas. Any increase in natural gas production will come mostly from deepwater K-G.
All E&P spending over the 2009-2010 year is expected to reach Rs 39,222 crore, ($8.6 billion). This was higher than the budget estimate for the year and plans for 2010-11 for E&P is expected to go up 18% from the current year.
K-G activity
ONGC -- In early 2005, state-run Oil and Natural Gas Corp. (ONGC) found gas in its Sagar Samriddhi deepwater exploration well in block KG-OS-DW-IV in the K-G basin. The well was completed at 2,450 m (just short of 8,050 ft). From that point, ONGC has determined cumulative K-G reserves at 130 million tons (118 million metric tons) of oil and oil-equivalent gas.
ONGC says these reserves would be integrated with nearby GS-29, G-1, and GS-15 structures for development. G1 and GS 15 fields are predominantly gas fields. GS 15 is scheduled to go onstream soon, and G1 is scheduled for April 2011.
G1 is 28 km (17 mi) off Amalapuram in water depths of 135 to 500 m (443 to 1,640 ft) GS 15, however, is in shallow waters 5 km (3 mi) from the coast. Together the fields are expected to produce a peak of 2 MMcm/d (70.6 MMcf/d) of gas. ONGC says they should produce almost 1 million metric tons (1.1 tons) of low-sulfur crude and 5.92 bcm (209 bcf) of gas over 15 years.
In 2006, ONGC again hit gas, this time at well UD1 in the K-G block KG-DWN-98/2.
GSPC -- Gujarat State Petroleum Corp. (GSPC) in 2005 made one of India’s largest K-G basin gas discoveries estimated at 20 tcf at its KG No. 8 well. In mid- 2006, GSPC made another discovery in the K-G basin, this time oil and gas. This discovery is expected to produce 4.8 MMcf/d and 862 b/d from a shallower strata with a lower temperature.
GSPC submitted in mid-2009 a development study and that calls for 16 additional wells to be drilled in block KG-OSN-2001/3, its Deendayal gas field. This past September, the Directorate General of Hydrocarbons (DGH) approved GSPC field development plan for 2 tcf from the high-temperature/high-pressure KG-8 Deendayal-West field. GSPC says it plans to spend $1.6 billion to develop the field with production at 10-12 MMcm/d (353-424 MMcf/d) by the end of 2011.
GSPC has drilled across 1,850 sq km (714 sq mi) of its KG basin holdings and has 15 wells in shallow waters with 11 successful, one untested, and the others dry. The company plans to drill additional wells in the area.
Reliance -- The discovery that really brought the K-G basin to world attention was Reliance Industries Ltd.’s (RIL’s) KG-DWN-98/l in block KG-D6. The first three discoveries (Dhirubhai-1, 2, and 3 have gas reserves estimated at 8 tcf.
In February 2006, RIL encountered the thickest hydrocarbon column so far in its MA-2 well. This column reached a depth of about 3.6 km (2.2 mi) and penetrated a gross hydrocarbon column of 194 m (636 ft) consisting of 170 m (558 ft) of gas and 24 m (79 ft) of oil. Initial production from MA field hit about 5,000 b/d and is expected to peak at 40,000 b/d. D-1 and D-3 are expected to reach 2.8 bcf/d.
In September 2007, India’s RIL found oil in the deepwater block KG-DWN-98/1 (KG-D4). RIL holds 100% interest in the 8,100-sq km (3,127-sq mi) block. The Dhirubha find was in a water depth of 565 m (1,854 ft) and was drilled to 3,595 m (11,795 ft). The well flowed 596 b/d of oil on DST.
This development was fasttracked despite being one of the most complicated underwater installation projects. Aker Kvaerner Subsea landed a $400-million engineering, procurement, and construction contract for the complete subsea production system. J. Ray McDermott got the EPIC work on the 9,015-ton (8,178-short ton) platform jacket.
Going forward
RIL has new plans for a multi-well drilling program in block KG-DWN-98/3. These plans could include as many as seven appraisal wells this year.
The MA oilfield in the block started producing this past September and has reached 11,000 b/d of oil. D-6 also produces 60 MMcm/d. Reliance has awarded to Aker Solutions a contract for MA field development. The $25-million contract includes testing and maintenance of subsea equipment over three years.
In its Mahanadi deepwater contract area MN-DWN-2003/1, RIL has plans for a five-well drilling program starting in the fourth quarter of this year. This D-4 project calls for five exploration wells.
Most of the 3D seismic results shot in the ultra deepwater block are represented in the block’s geological model. Apart from 3,600 sq km (1,390 sq mi) of 3D, the seismic work includes 2D data in the contract area. MN-DWN-2003/1, 110 km (68 mi) offshore, covers 17,000 sq km (6,564 sq mi). The petroleum ministry approved the deepwater exploration, including ultra deepwater drilling, at the end of 2009. Since that time, RIL says specific ultra deepwater areas in the Mahanadi block are marked for seismic work.
RIL also has a gas discovery in well KGVD3-R1 in deepwater block KG-DWN-2003/1. The block was awarded under the Fifth Round of the New Exploration Licensing Policy (NELP-V) to a consortium of RIL and Hardy Exploration and Production (India) Ltd. It covers an area of 3,288 sq km (1,270 sq mi).
KGVD3-R1, renamed Dhirubhai-44, was drilled to TD of 4,113 m (13,494 ft) and encountered three Miocene gas zones with gross thicknesses of 4.4 m (14.5 ft), 22.75 m (75 ft), and 15.80 m (52 ft), respectively, in intervals from 3,709 m (12,169 ft) to 3,713 m (12,182 ft), 3,849 m (12,628 ft) to 3,871 m (12,000 ft), and 3,881 m (12,734 ft) to 3,896 m (12,782 ft). Each zone was perforated and tested.
GSPC expects to hire a modern jackup rig for a year to drill starting in the middle of this year on its Krishna-Godavari development, first in KG-OSN-2001/3. The overall development plan calls for 11 new development wells in addition to the existing four wells.
Deep Driller-1 -- to be hired on a one-year contract with two six-month optional extensions -- may start drilling at the KG-8 well. GSPC is in the process of floating more tenders for an onshore facility while a tender for an offshore terminal is likely to follow. Both terminals -- part of the field development plan will be completed by March 2012. At peak, the block is expected to produce 6-8 MMcm/d (212-283 MMcf/d). First gas production in the eastern offshore block should come in December 2011. GSPC has government approval for commercial development of KG-8, KG-17, KG-15, and KG-28 in the K-G block.
GSPC plans a 16-slot wellhead platform in K-G block KG-OSN-2001/3. With tenders just going out, the schedule calls for platform installation by March 2012. Other major tenders for EPC contracts cover plans for a wellhead platform and central processing platforms feeding an onshore gas treatment facility.
Oil India Ltd. (OIL) plans a 3D seismic program for its Krishna Godavari block KG-ONN-2004/1 to start at presstime. The proposed survey is expected to cover 500 sq km (193 sq mi). OIL says it plans to drill 12 wells in the K-G block. The 3D seismic survey aims to identify multiple drilling prospects.
India looks for energy further from home, runs into neighbor
India’s oil ministry has requested the government create a fund to allow the ministry to compete with China for energy supplies outside the country.
According to a report by Bloomberg, China has foreign exchange reserves of $2.4 trillion, $300 billion in a sovereign fund, plus Chinese companies spent $32 billion in 2009 buying foreign petroleum, coal, and metal supplies.
In contrast, India has reserves of $254 billion, and the state-run Oil & Natural Gas Commission (ONGC) was the only organization buying energy outside of the country, and it spent $2.1 billion. That was spent to purchase a single entity, Imperial Energy Plc. The country has no national fund to secure energy supplies overseas.
Some of India’s competitive edge may be lost in the halls of government. Bloomberg reports that CNOOC Ltd., the Chinese national offshore oil company, stepped into Nigeria to take a stake in an oil field after ONGC dropped its bid when the government of India stopped the acquisition.
With the two most populous countries in the world, both predicting growing economies and even faster increases in energy demand, starting to compete with traditional energy buyers such as Japan and the US, rising prices for petroleum would seem to be a logical result.
