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Published on: Jan. 25, 2021, 12:40 a.m.
ONGC digs up a fortune
  • To date, ONGC has invested Rs3,361crore to explore hydrocarbon in the Bengal Basin

By Sajal Bose. Deputy Editor, Business India

India’s oil & gas output has been stagnant for years, forcing the country to increase its reliance on imports to meetrising fuel demand. But the Oil & Natural Gas Corporation (ONGC) now has reason to cheer; it has found a reserve in West Bengal and has begun production. 

The Ashoknagar Oilfield, located 50km from Kolkata, was discovered in 2018 by ONGC – the first oil field in West Bengal to date. ONGC had extracted a sample of 20 kl of crude oil from the oilfield in early November and sent it to Indian Oil’s Haldia Refinery for processing and the tests revealeda high-grade product. 

The Ashoknagar field falls under the Mahanadi-Bengal-Andaman basin. West Bengal has always been a promising location for oil & gas. ONGC has been exploring the state for decades and invested substantially in the endeavour; but commercial viability of the sample was always an issue. 

The corporationhas now taken a major step, by commencing oil production from the well at Ashoknagar I, Bengal Basin, district 24 Parganas. Ashoknagar Iisnow counted as an oil producer under the Early-Monetisation Plan issued by the government of India. This means that ONGC has discovered and put into production seven out of its eight basins in India, covering 83 per cent of the established oil & gas reserves. The corporation is India’s largest oil & gas producer, contributing 72 per cent of the country’s hydrocarbon production.

“The discovery will play a major role in India’s energy security and will reduce its dependence on oil imports,” remarked Dharmendra Pradhan, minister for petroleum & natural gas and steel,who dedicated the Ashoknagar Oilfield discovery to the nation by switching on the sucker rod pump that lifts oil from the well. Pradhan congratulated ONGC for its seven decades of relentless effort, which has now borne fruit, giving hope for more robust development of the state. The Bengal Basin has, at last, become qualified to be on the oil and gas map of the world, he added. 

New phase of prosperity

“The government is committed to fully support ONGC,” assured the minister.“This is a turning point in its efforts to bring more oil and gas from the sub-surface of West Bengal and help bring in a new phase of prosperity, alongwith employment opportunities for the state and its people. This is a moment of national pride– such a gift coming from the soil of West Bengal to India.” The commencement of commercial production is expected soon, now thatthe election for the state assembly is around the corner. Politically, Bengal is now a priority for the Modi government. The minister evaded questions on the extent of the reserve and the commercial viability of the Ashoknagar project.

Re-energised by this discovery and eager to script more success stories in the newly awarded Open Acreage Licensing Policy (OALP) in the Bengal basin, ONGC has already set in motion a slew of fresh geo-scientific activities, comprising the appraisal of the Ashoknagar discovery covering an area of about 739 sq km, including a 3D seismic, low-frequency passive seismic (LFPS) survey and the drilling of two wells. The Bengal Basin is spread across nearly 122,000 sq km, with nearly two-thirds of it engulfed by the Bay of Bengal.

To date, ONGC has invested Rs3,361crore to explore hydrocarbon in the Bengal Basin. Rs425 crore more will be spent on exploration activities in the basin in the next two years. It is reported that the field is likely to have more natural gas reserves than oil. The upper layer, about 2,268 m beneath the surface, holds oil, while the gas sits a further 100 m below.

The state government too did not let go of the opportunity to earn political mileage before the election, by demonstrating its extended support to the oil company. The Bengal government announced it would provide 40 acres of land free of cost to ONGC to develop the Ashoknagar block, hoping that the find would catalyse industrial resurgence in the state. “The state government is happy to provide the land free of cost,” affirmed Mamata Banerjee, chief minister, Bengal. ONGC wanted to pay but we refused the offer. As long as it sets up industries here, we will provide all the land and other assistance.” 

Earlier, the state had received a letter from ONGC for a settlement of about 40 acres of state-owned land for the installation of a quick production system, with a green belt area and allied infrastructure. The chief minister suggested that an integrated development could take place involving large, medium, small and micro industries around the discovery of oil & gas in Ashoknagar and the Indian Oil Corporation’s refinery at Haldia. “This is only the beginning; more success in the near future will help reduce the import of oil and make Bengal a future energy destination,” commented Banerjee. 

However, the long-time commercial viability of the project needs to be ascertained. More details about the project will emerge only after the state election a few months from now.

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