7 Key Developments in ONGC's Oil and Gas Operations

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1. ONGC's Recent Oil Well Opening in KG Field

ONGC has marked a significant milestone by starting production from its fifth oil well in the Krishna Godavari basin. This move is expected to enhance crude oil and natural gas output, with the firm aiming to achieve zero gas flaring.

2. Expected Production Levels and Gas Output

The peak production from the field is expected to be 45,000 barrels of oil per day (bopd) and over 10 million standard cubic meters per day (mmscd) of gas. This gas will be used for various purposes including making fertilizers, generating electricity, and turning into CNG for use in automobiles.

3. Current Production Figures

As of January 2024, ONGC was producing 12,000 bopd and 0.4 mmscmd of gas from the eastern offshore block. The addition of the new well is expected to increase the gas output to 1.5 mmscmd.

4. Future Plans and Expected Growth

ONGC plans to open further wells in the third and fourth quarters of 2024, which would add to the oil production rate. By March 2025, the firm expects to have a production rate of about 30,000 bopd plus, with gas output reaching 6 mmscmd.

5. Use of Floating Production, Storage, and Offloading (FPSO) Vessel

ONGC is leveraging a floating production, storage, and offloading (FPSO) vessel, Armada Sterling-V, to transport and sell associated gas. This vessel has been crucial in the production process, ensuring efficient handling of oil and gas.

6. Impact of Rising Crude Oil Prices on ONGC's Stock

Rising crude oil prices have positively impacted ONGC's stock performance. Despite a recent correction, ONGC shares have gained nearly 3% in the BSE, driven by the increasing tensions in the Middle East and Brent crude's significant rise.

7. ONGC's Commitment to Sustainability

ONGC is committed to achieving zero gas flaring and has successfully commissioned its gas export line from the offshore-to-onshore terminal. The company is also transforming into a low-carbon energy player, aligning with India's energy transition goals.