India currently produces about 90 million standard cubic meters of natural gas and plans to significantly improve its production by 2022 to reduce its dependence on imports and replace some of the liquid polluting fuels to reduce its emissions.
Speaking on the sidelines of the Petrotech conference in the suburbs of Delhi, officials said that ONGC and OIL had made a dozen discoveries, unsustainable at the price of gasoline prescribed by the government.
These discoveries, they said, require a higher price, and the government's plans for special incentives for them would help bring them quickly to production.
Petroleum Minister Dharmendra Pradhan said last month "a special incentive in addition to the incentive already provided" will be given to the difficult areas of ONGC.
"We do not know what this incentive will be, but we presume it will be a higher and more profitable price," said one official.
State companies Oil and Natural Gas Corp. (ONGC) and Oil India Ltd (OIL) have not been able to value discoveries or put them into production, the current price of gas of 3, USD 36 per million of British thermal units being significantly lower. as the cost of production.
According to officials, ONGC has about 35 billion cubic meters of recoverable reserves, discovered in the shallow sea off Andhra Pradesh in the east, and off Gujarat and Mumbai on the west coast.
The three blocks in the Krishna Godavari Basin, Kutch Gulf, and Mumbai, off the coast, can produce about 10 million cubic meters of gas and an equivalent amount can be produced from its onshore discoveries in blocks. like Bantumili, Mandapeta and Bhuvanagiri, they said.
It is possible to add about 5 million m3 of production by investing in existing fields such as Mumbai High South, Neelam and B-127 Cluster in the Arabian Sea.
Oil India Ltd (OIL) has discovered more than 3 billion cubic meters of recoverable reserves in the Krishna Godavari Basin in Andhra Pradesh, but needs a higher price to put it into production.
Officials said all these areas could be rapidly developed and monetized if the price and marketing freedom were granted by the government.
CGSB and OIL want a price of more than $ 6 per MBtu to help them produce the gas without incurring losses.
In the absence of a viable gasoline price, they will have to spoil their $ 3 billion projects, officials said.
The BJP-led government developed a new pricing formula in October 2014 using prevailing rates in gas surplus countries such as the United States, Canada, and Russia to determine the price in a net importing country.
Prices using this formula are calculated twice a year. While the government has allowed a higher rate of $ 7.67 per mmBtu for gas fields located in difficult areas such as the deep sea, the KG-OSN-2004/1 basin block of the NGO Krishna Godavari, which contains about 15 billion m3 of recoverable reserves, is in shallow waters and is not a "difficult area".
The fate of the MB-OSN-2005/1 basin block of Mumbai on the west side is similar. Block GK-28/42 in the Gulf of Kutch is a nomination block that does not qualify for higher rates, they said.
The CGSB and OIL ground discoveries also do not benefit from the highest rates. While the CGSB block KG can produce a 5mmscmd peak output, the same result of GK-28/42 should be about 2.5mmscmd. The peak output of MB-OSN-2005/1 should reach a little under 3 mmscmd.
Petroleum Minister Dharmendra Pradhan, in a written response to a question in the Lok Sabha of March 20, 2017, stated that the cost of producing natural gas in the prolific Krishna Godavari Basin was between $ 4.99 and 7, $ 30 per mmBu.
The same for the other basins is between $ 3.80 and $ 6.59 per mmBtu, he said, adding that the cost of producing the companies varies from field to field in depending on tank size, location, logistics and availability of surface facilities.