ONGC to Invest Rs 4,600 Crore in 10 Development Wells and Infrastructure in KG Basin

Oil and Natural Gas Corporation Limited (ONGC) will invest over Rs 4,600 crore to drill 10 development wells, establish two unmanned platforms, lay an offshore pipeline, and set up an onshore gas processing facility in Konaseema district of Andhra Pradesh.

According to the minutes of a meeting held on July 24 by the Experts Appraisal Committee (EAC) under the Ministry of Environment and Forests, ONGC has approached the ministry for fresh environmental clearance for the proposed project.

The Director General of Hydrocarbons had issued Letters of Award in September 2022 for offshore oil and gas contract areas KG/OSDSF/CHANDRIKA/2021 (Chandrika) covering 697 sq km and KG/OSDSF/GS49/2021 (GS49) covering 148 sq km on the east coast under the Discovered Small Field-III (DSF-III) round.

The total land requirement for the project is 26.3 hectares at the Odalarevu Terminal site, with 8.7 hectares, or 33 percent of the total area, to be developed as a greenbelt. The estimated project cost is Rs 4,606.35 crore. The capital cost for the Environmental Management Plan (EMP) is pegged at Rs 14 crore, with a recurring annual cost of Rs 3 crore. An additional Rs 14 crore has been allocated towards the Extended EMP under Corporate Environment Responsibility.

A development well is drilled in a proven hydrocarbon area to extract oil or gas after exploration and appraisal confirm commercially viable reserves. The ONGC project is expected to create around 150 direct jobs and 310 indirect jobs.

The proposal was previously reviewed by the EAC in February this year but was deferred as the committee sought additional information from ONGC. In its latest review, the EAC has once again deferred the proposal, asking for further inputs. The panel has also advised ONGC to conduct a comprehensive biodiversity assessment to evaluate the environmental impact of drilling and to prepare a restoration action plan with a dedicated budget for implementation.