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Big investments coming up-I: KG Basin will see a massive inflow of funds
Jun 16: The big bang $ 6 billion investment announcement by the RIL-BP combine with first gas by 2020 and the ongoing $ 5 billion investment by ONGC in same area, makes the KG Basin a key focus area of the global offshore oil and gas equipment industry.
8ONGC's total investments will total up to around $ 7-10 billion as more discoveries -- including the struggling Deendayal field -- are brought into production.
8The investment cycle which is beginning now will be completed by 2020, and depending up on how gas prices behave, another round of investments will be set off subsequently.
8RIL-BP had been quietly doing the groundwork for the investment for the past one year and contracts are likely to be given out by the end of the year or beginning 2018, going by the first gas deadline.
8Both ONGC and RIL-BP are working towards completing their contracting processes as quickly as possible to take advantage of low prevailing prices for oil field equipment and services.
8The point to note is that combine already has a big oil & gas infrastructure in place in the KG Basin, which is capable of handling 120 MMSCD of gas. This provides a cost advantage to RIL-BP over ONGC, because the latter will have to put together a delivery and processing infrastructure.
8There was talk at one point in time for ONGC and RIL-BP to have a common infrastructure but clearly non-economic considerations put paid to such efforts.
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