India to splash deepwater billions

Deepwater gasfields off India’s eastern coast will be the centre of attention over the next few years, as India is gearing up to develop gas discoveries to the tune of around 566 bcm (20 tcf).

Speaking to local media late on Wednesday, Minister of State for Petroleum and Natural Gas Dharmendra Pradhan said India would invest some USD 20 billion over the next five to seven years in developing its offshore discoveries. He added that the first priority would be to ensure funds are poured into assets controlled by ONGC, the KG-DWN-98/2 block, and the one operated by the Reliance Industries-BP joint venture, KG-D6.

“We are now expediting production of gas from domestic sources to the extent of 20 Tcf [566 bcm] from already discovered sources through policy, fiscal and regulatory mechanism,” Pradhan said on Wednesday. In March, he urged the Indian government to press ahead with a new pricing formula for undeveloped, difficult-to-reach gas resources, including deepwater discoveries and gas found in high-pressure zones, in an effort incentivise exploration there.

ONGC’s development work at KG-DWN-98/2 is reportedly valued at USD 5 billion, with further development necessitating an additional USD 2 billion or USD 3 billion. The investment in efforts at KG-D6 are estimated at more than USD 3 billion. Developing the resources in the two blocks should help increase the share of gas in India’s energy matrix, Pradhan said, with the country targeting 15% without giving a specific timeframe.

“We are determined to increase the gas offtake significantly as it would serve several objectives. By switching to this cleaner fuel and diversifying our energy mix, we can augment our fight towards climate justice,” the minister also said of the efforts.