India's largest public sector enterprise (PSE) Oil and Natural Gas Corporation (ONGC) is embarking on an aggressive oil and gas exploration and production (E&P) plan as its producing fields are ageing and production is coming down. The energy major is planning to team up with global experts for joint E&P efforts and is close to signing a memorandum of understanding (MoU) with U.S. energy giant ExxonMobil, Alka Mittal, chairman and managing director of ONGC told Fortune India.

In an exclusive interaction, Mittal says ONGC is planning to invest ₹31,000 crore in the next three years in exploration. This will help the company achieve its acreage acquisition programme to bring around 5,00,000 sq. km. under active exploration by 2025. ONGC has initiated the process of acquiring 70,000 line kilometre (LKM) 2D seismic data in eastern and western offshore areas under government funding. To bring the Andaman Basin under accelerated exploration, activities on the 'National Island Exploration Project' has also been initiated by the company.

Over the past five years, ONGC has made cumulative core E&P spends of over ₹1,50,000 crore. To date, 20 major projects are under implementation, with a total project cost of around ₹59,000 crore, with an envisaged gain of 85.5 million metric tonnes of oil equivalent (mmtoe), she says.

ONGC is expecting its crude oil production to rise from 19.545 million tonnes in FY22 to 19.88 million tonnes this year. The output is expected to rise to 21.701 million tonnes by 2024-25. Gas production is expected to rise from 20.907 billion cubic meters (bcm) in FY 22 to 21.097 bcm in FY23 and to 26.124 bcm by FY26.

A big challenge ONGC is facing is the portfolio of ageing fields. The majority of its fields are decades old and intervention in terms of technology upgradation and implementation of innovative solutions to augment oil and gas production is the need of the hour, says the ONGC CMD.

"We have been reaching out to global majors for collaborative efforts in exploration and production activities. Towards developing our small and marginal fields, we are seeking partnerships with domestic companies. This will also help build an ecosystem with ONGC facilitating new players to come up and prosper in the Indian E&P system," she says.

She notes there was a period when crude oil prices were very low, and globally, during low crude oil price windows, the investment in upstream business came down. "However, being the national oil company of India, ONGC was one of the few E&P companies in the world, which did not cut their CAPEX, so as to ensure the much-needed energy for the country does not drop down due to low investments", says Mittal.

While legacy fields continue to be the mainstay of base production, there is significant traction on the development of new fields as well as new schemes for maximising recovery in mature areas. Further, ONGC is strongly pursuing projects for improving recovery from existing fields, she says.

ONGC made four oil and gas discoveries during the last year. The biggest exploratory success last year was at Hatta#3 in Son valley of Madhya Pradesh, where the well produced more than 60,000 cubic meters per day on testing and confirmed the commercial production potential of Vindhyan Basin. With development and production, this has the potential of becoming the ninth producing basin of India. Similarly, a mega offshore deep-water project on the East Coast, Cluster-2 Development of KG-DWN-98/2, is expected to substantially enhance our natural gas production, says Mittal.

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