Date:03/03/2007 URL: http://www.thehindubusinessline.com/2007/03/03/stories/2007030305910300.htm

KG gas find: ONGC may come back with appraisal plan

Our Bureau

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New Delhi March 2 The Directorate General of Hydrocarbons (DGH) has proposed that the state-owned ONGC could come back with a fresh commercial or appraisal plan for its gas find in Krishna Godavari (KG) basin for it to be declared as commercial discovery.

The Director General, Mr V.K. Sibal, told Business Line, "We have received the company's communication. There was gas found in the well UD-1 of KG Basin, but since the discovery well was abandoned without conventional testing, this being the third such instance, we wanted them to follow the conventional method to ascertain its commerciality."

ONGC could either re-enter the well and get the discovery proven commercially or drill another well. Last month, a dispute arose between DGH and ONGC on the discovery in well UD-1 in KG basin block after the upstream technical regulator had disallowed the find.

ONGC had contested the DGH stating its assessment of over 14 trillion cubic feet of in-place reserves was based on the MDT test, which is done globally to check discoveries and had been, conducted in presence of the regulator.

"This is the third well ONGC abandoned due to technical failure. All we said was that since you had taken 148 days to drill the well, you might as well spend another 7-8 days to do conventional testing to ascertain the commerciality, as there has been reports of major gas find in the region," Mr Sibal said.

ONGC has been maintaining that the conventional testing was not carried out, not because of any complications but because it was not felt necessary. A Straddle-packer MDT test is globally recognised as a cheaper, sophisticated and less-time consuming way of ascertaining a discovery.