Oil and Natural Gas Corp. Ltd. has begun an exercise to shed excess cost at Panna-Mukta oil and gas fields, whose control it regained after two-and-a-half decades.
ONGC has already saved Rs 1 crore in shipping cost at the fields off Mumbai coast.
The state-run oil and gas explorer has changed the contract for bringing oil produced from the fields lying in the Arabian Sea to land, resulting in saving of about $5,000 per day, sources said. It is expecting an upside in production too after a re-appraisal.
According to the sources, the previous operators—Shell India and Reliance Industries Ltd. had engaged a floating storage and transportation vessel from Mercator Ltd. for shipping oil. Soon after taking over the field last month, ONGC changed the shipper to state-owned Shipping Corporation of India Ltd., resulting in savings of $5,000 per day.
ONGC will now lay a small undersea pipeline to completely do away with the requirement of hiring ships for transporting oil to land.
ONGC had discovered the Panna-Mukta and Tapti oil and gas fields in the Arabian Sea off the Mumbai coast in early 1990s, but they were taken away from the company and allotted to U.S.-based Enron Corp. and Reliance in 1994. ONGC, as a government nominee, was given 40 percent back-in rights.
Enron, during its bankruptcy, was taken over by BG Group of the U.K. in 2003. BG Group's interest was subsequently taken over by Shell in 2016.
The 25-year production sharing contracts for the Panna-Mukta and Tapti fields expired on 21 Dec., and Reliance and Shell decided not to seek an extension for the same.
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