Setback in ONGC's KG-DWN-98/2 Block-I: Why was a collaborative model nixed?
Early indications that the commissioning of ONGC's KG-DWN-98/2 block is going to be delayed until 2021 will require close scrutiny. For ONGC, it is a massive $5 billion investment and any delay will hurt the company badly. In this context, The entire decision making chain, going right down to the controversial choice of consultants and the design format for the block may need a thorough relook. 8At a point before an investment decision was taken, ONGC had spurned an offer by the RIL-BP combine for joint development of the KG Basin discoveries. On hindsight, would it have made more sense for the public sector giant to take it up? 8For both RIL-BP and ONGC, the KG Basin represents foraging into rough weather and treacherous geology. And RIL-BP more than ONGC had both the experience and extra infrastructure available for a collaborative development programme. 8Could such a model been better than ONGC going it alone? 8For the collaboration model to succeed, all three blocks -- RIL's KG D-6, GSPC's KG-OSN-2001/3 and ONGC's KG-DWN-98/2 -- and some other discoveries around them -- particularly by ONGC -- would have had to be developed holistically rather than as a piecemeal exercise. 8ONGC in fact had conducted two studies around this model. One was a report by Aker that said that ONGC can save a large amount of money by using RIL's infrastructure built for the KG D-6 block. The report said that RIL's Deep Water Pipeline End Manifold (DWPLEM) along with other attendant manifolds as well as the Umbilical Distribution Hub were located a few kilometers away from ONGC's proposed KG DWN-98/2wells and they had the spare capacity for necessary tie-ins. What was more, RIL's Control Riser Platform (CRP) too has a spare capacity for sub-sea infrastructure. 8There was an attempt around that time to rethink the proposal to go it alone and the argument was rather strong that ONGC could avoid a duplication of infrastructure. 8The other report was by Blade Energy, which had done work earlier on the Deendayal field, to develop an all-encompassing and consistent strategy for appraisal and exploitation of all the cretaceous-synrift and tight gas plays in its blocks in the immediate vicinity of the GSPC block,. Blade estimated in-place volume of a massive 23 TCF of gas. Blade's findings were that the geology of these blocks -- in cretaceous-synrift and high pressure-high temperature settings -- was akin to that of the GSPC block and there was a recognition the exploitation of such blocks would require a different approach from conventional play. Unless the best technology was used and resources were expended economically, it would be difficult to make money from these blocks, the report had concluded. 8In this context, a joint undertaking, involving RIL-BP and ONGC was strongly suggested and this line of argument was pursued for a reasonable period of time before it was nixed.