India, the world’s fourth-largest importer of LNG, wants to increase local gas production as Prime Minister Narendra Modi has set a goal of increasing the share of cleaner fuel in the national energy mix to 15% by 2030 from the current 6%.
Most of the future gas production is expected from the Krishna Godavari basin, where ONGC and Reliance Industries operate the blocks. Reliance’s goal is to produce 30 million meters3/ d gas by 2023 from its assets in the basin.
ONGC will increase production from its Krishna Godavari Basin block to about 3-3.5 million m3/ d from May, which will further increase to 8.5 million m3/ d 2022/23. before reaching its highest rate in 2024, said company chief financial officer Subhash Kumar.
The combined production of Reliance and ONGC will be about 60% of the average 77 million m3/ d Indian companies produced in April-December 2020.
To make its gas business profitable, ONGC has established a new subsidiary and expects the government to raise local prices.
Current local gas prices of $ 1.79 per million British thermal units (mmBtu) have hit ONGC revenue. The company’s production costs are 3.5 to 3.7 USD / mmBtu, he said.
The company will allocate the entire gas business to a new subsidiary. ONGC holds a stake in offshore gas resources and overseas gas blocks either directly or through its subsidiaries.
Kumar said the new subsidiary will compete for gas produced by ONGC for use in the group’s refining and petrochemical plans.
“As for the coming years, the gas story will unfold which will be critical to the company’s sustainable positive performance,” Kumar said.
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