ONGC, partners to invest Rs 1,100 cr in Cambay block

Mumbai: State-run Oil and Natural Gas Corp (ONGC) and its partners — Tata Petrodyne and Hindustan Oil Exploration Co — will invest Rs 1,100 crore in developing an offshore block in the Gulf of Cambay, off the west coast of India.

The area is an extension of the onshore Cambay basin in Gujarat where major oil and gas fields like Gandhar are located.

“The operating committee (of the block) met last week and agreed for the development plan. We are now awaiting a meeting of the managing committee. Once an approval is obtained, we will flag off work on the block,” said a senior official from Tata Petrodyne.

The official, who did not want to be named, added the partners would bring in Rs 1,100 crore in proportion to their participating interest in the the the CB-OS/1 block.

ONGC, with a 55.26 per cent stake, is the operator of the block. It bought the stake from BG Exploration and Production (India) Ltd in January 2005. While Tata Petrodyne holds a participating interest of 6.70 per cent, Hindustan Oil holds 38.04 per cent.

According to Tata Petrodyne's website, the minimum work obligation of drilling seven wells in the phase I of block exploration was completed in 2002. The consortium decided not to proceed to the phase II of exploration and retained only three discovery areas — A, D and Harinagar structures.

Feasibility studies conducted to develop the ‘A’ and ‘D’ structures indicated developing the ‘A’ structure was commercially viable, while the ‘D’ structure was not so viable. Accordingly, the operating committee of the block approved the commerciality of the Gulf ‘A’ discovery with initial oil reserves of 48 million barrels, of which 11 million barrels are recoverable as of now.

Production from this block is expected to commence in 2015. "The operating committee of the block CB-OS/1 has approved on July 17, 2013, the revised plan of development submitted by the operator, entailing offshore development scheme for Gulf A discovery,” said Hindustan Oil in its June quarter report. ONGC is also pursuing with the government of India for approval of commercial discovery report for Harinagar area, it added.

Hindustan Oil posted a net loss at Rs 18.3 crore in the first quarter against a profit of Rs 1.48 crore a year ago. It had posted a loss of Rs 28.33 crore in the previous quarter.