ONGC is likely to start production from its G-1 field in KG Basin soon. The commissioning and stabilization of the project is expected by August 2013. However, the Company had informed the Project Appraisal Committee that In case of inability to complete and tie in all wells, balance tie-in will be taken up during fair weather of 2014 and completed by February 2014.
Meanwhile, ONGC has also sought additional sanction of Rs. 701.25 Crore for Integrated Development Project of G-l and GS-15 in Eastern Offshore. At the Project Appraisal Committee meeting, ONGC informed that G-l and GS-15 fields in KG offshore has been suffering setbacks due to various unprecedented challenges beyond the control of ONGC as well as technical challenges facing the subsea industry. ONGC Board had earlier approved the revised cost of Rs. 2735.65 Crore in January 2012. The company officials informed the committee that there have been cost overruns and sought approval of the revised cost estimate of Rs. 3436.90 crore seeking additional sanction of Rs.701.25 Crore.
ONGC officials informed the Committee that cost overrun is mainly due to time overrun of shifting of the deep water campaign from 2012 season to 2013-2014 season. During 2012 season, the Deep water contractor Subsea7 was demobilized as the wells were not completed and remobilization of the contractor to complete the balance works in fair weather of 2013 has led to an increase of Rs. 274.99 Crore in E&C cost. Further cost increase is on account of change orders for additional work executed, additional cost incurred in onshore terminal and consultancy works due to the shift in completion of balance works and preservation of gas compressors and other equipment. The cost for drilling and well completion has also increased by Rs.290.08 Crore.
ONGC Board had initially accorded approval to implement the project at a total capital cost of Rs. 1262.93 crore in November 2004 with project completion scheduled for April 2006. The GS-15 platform has been put on production since August 31, 2011 and further efforts are being made to commission G-l facilities and start production from G-l field soon.
