ONGC's Krishna-Godavari Basin Project To Boost India's Crude Oil Production, Annual Savings Of Rs 10,600 Crore Anticipated

In a major development, the state-owned Oil and Natural Gas Corporation (ONGC) is gearing up to commence crude oil production from its flagship deep-water project in the Krishna-Godavari (KG) basin next week.

This strategic move is poised to significantly contribute to India's self-sufficiency in oil, potentially saving the country nearly Rs 11,000 crore annually, reported NDTV.

Currently, India imports 85 per cent of its crude oil and half of its natural gas requirements.

ONGC's capital expenditure plan, of Rs 1 lakh crore for petrochemical projects by 2028-2030, adds another dimension to its ambitious growth strategy.

The imminent production from the KG Basin is anticipated to reverse the declining trend in ONGC's output, providing a substantial boost to the state-owned hydrocarbon giant.

The block encompasses multiple discoveries grouped into clusters, with cluster-2 set to commence production first.

While initial oil production was scheduled for November 2021, delays pushed the deadline several times.

At a Brent Crude price of $77.4, the anticipated daily savings from this output alone would be Rs 29 crore (at Rs 83.29 to $1), translating to a staggering Rs 10,600 crore annually.

ONGC plans to employ 75 rigs for drilling, aiming to produce from three to four wells initially, with peak oil production projected at 45,000 barrels per day by FY 24-25.

The commencement of production from this deep-water project is seen as a crucial step to reduce India's dependence on oil imports, contributing approximately 7 per cent of the country's output at peak production.