ONGC likely to strike oil in Cauvery deepwater block
State-run ONGC is close to striking black gold in its Cauvery basin deepwater block, with the first well drilled in the block expected to reach the target depth by the end of this month.
According to an estimate by ONGC���s Norwegian partner Rocksource ASA: ���The mean unrisked resources of the exploration block are estimated to be approximately 2.9 billion barrels of oil equivalent (boe).��� Mean unrisked resources estimate prospective volume assuming that the drilling of an exploration well is successful. It is understood from Rocksource that the first well in the block is expected to reach the reservoir by September-end and final results are expected in October.
On Monday, Rocksource signed a farm-in agreement with ONGC to pick up 10% equity stake in the deepwater block.
The Oslo-based firm has been providing technical support to ONGC in the block. ���The main prospect in the block displays a high quality, positive controlled source electromagnetic (CSEM) anomaly as interpreted by Rocksource using its proprietary software, Rocksource Discover. The prospect is estimated to have a mean resource size of approximately 1.6 billion boe and the chance of success is estimated to be in excess of 60%,��� a Rocksource official said. The term boe is used by oil and gas companies for denoting both oil and natural gas reserves and production in single unit. A boe is about 6,000 cubic feet or 170 cubic meters of natural gas.
It is learnt that the farm-in agreement was a continuation of a memorandum of understanding (MoU) between ONGC and Rocksource entered in January this year to develop exploration partnerships. ���In a success case where discoveries are put into production, Rocksource will pay a bonus to ONGC in the form of $1 per produced barrel of oil, and $0.5 per produced barrel of oil equivalent gas. In a case where Rocksource decides to exit the block, ONGC will receive 20% of any gain achieved,��� the official said.
ONGC has already farmed out a 25% stake in the block to Brazilian oil firm Petrobras. After the agreement with Rocksource, ONGC���s stake in the block is reduced to 45% (with operatorship). Oil India (OIL) continues to have a 20% stake in the block while Petrobras and Rocksource have 25% and 10% stake, respectively. An official in ONGC confirmed the development. The stake sale to Rocksource is subject to government approval. The block was awarded to ONGC under the third round of new exploration licensing policy (Nelp-III).
ONGC joined hands with the Norwegian enterprise for its expertise in electromagnetic processing and interpretation. Rocksource has licenses to produce hydrocarbon in Texas, US. It has 16 exploration licenses on the UK Continental Shelf and two licenses on the Norwegian Continental Shelf.