Oil and Natural Gas Corporation (ONGC) has commenced crude oil production from its deepwater Block KG-DWN-98/2 in the Krishna Godavari (KG) basin, off the coast of Andhra Pradesh. The project, unofficially referred to by the Centre as "Samudra Manthan" (churning of the ocean), began crude oil extraction last week, marking a significant development in India's efforts to enhance domestic hydrocarbon output.

This initiative is central to India's strategy to bolster its energy security and reduce its substantial reliance on crude oil imports, which currently account for over 80% of the nation's consumption. The full operationalization of the KG-DWN-98/2 block is anticipated to significantly contribute to the country's indigenous oil and gas production, aligning with the broader national objective of achieving greater energy independence.

The complex deepwater project, developed by ONGC, utilizes a Floating Production Storage and Offloading (FPSO) vessel named "Armada Sterling V." This specialized vessel is designed to process and store oil and gas retrieved from the deep sea before offloading. The recent commencement of crude oil production represents the integration of the FPSO with sub-sea wells in the Cluster-II region, forming part of Phase 2 of the project's development. While the first gas from the block was produced in March 2020, crude production faced delays, making this recent commencement a critical milestone.

Key details regarding the project include:

  • Location: Krishna Godavari (KG) basin, specifically Block KG-DWN-98/2, situated off the coast of Andhra Pradesh.
  • Estimated Project Cost: Approximately $5 billion (about Rs 40,000 crore).
  • Peak Oil Production Target: The block is targeted to achieve a peak crude oil production of 45,000 barrels per day (bpd).
  • Peak Gas Production Target: Expected to reach 10 million standard cubic meters per day (MSCMD).
  • Estimated Lifetime Yield: The block is projected to yield approximately 23.53 million tonnes of crude oil and 50.7 billion cubic meters of gas over its operational lifetime.
  • National Production Impact: Once fully operational, the project is expected to increase India's overall oil production by 11% and gas production by 15%.

Looking ahead, ONGC anticipates gas production from the block to commence in May-June 2024, further augmenting the output from the KG-DWN-98/2 asset. The phased development and full operationalization of this deep-sea project are expected to play a crucial role in shaping India's future energy landscape and reducing its dependence on global energy markets.