ONGC to start gas production from KG Basin block in 2016-17

New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) will start producing natural gas from a block that sits next to Reliance Industries' (RIL) prolific KG-D6 fields in the Bay of Bengal in 2016-17.

Minister of state for petroleum and natural gas Jitin Prasada today informed the Lok Sabha that in-place gas reserves of 3.42 trillion cubic feet have been established in block KG-DWN-98/2, in the Krishna-Godavari basin.

Of this, 1.904 trillion cubic feet (Tcf) is recoverable.

"ONGC has submitted Declaration of Commerciality (DoC) for the Northern and Southern Discovery Area in the block," he said.

Seven of the finds are in the northern part of the block, where Cairn India holds a minority 10% stake. Gas from these is proposed to be produced by combining them with two other gas discoveries in the adjacent block, he said.

"The DoC is under examination in the Directorate General of Hydrocarbons (DGH)," he said.

While Mr Prasada did not indicate the expected production from the block, company sources said 25-30 million standard cubic metres per day (mmscmd) of gas can be produced by 2016.

Once the DGH approves the commercial viability of the finds, ONGC will make a formal field development plan (FDP) outlining the specifics of producing gas from the find.

ONGC has tentatively pegged the investment required for bringing to production the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in the Northern Discovery Area (NDA) of the block at over $5 billion, sources said.

As the discoveries are not independently viable, the firm plans to tie them with finds in the neighbouring acreage and develop them as a cluster. ONGC envisages 25-30 mmscmd of output from the NDA fields and G-4 and GS-29 finds in the neighbouring acreage by 2016.

ONGC's KG-DWN-98/2 block sits next to the prolific KG-D6 block of Reliance Industries in the Krishna-Godavari basin, off the East Coast.

The state-owned company had a few months back put an investment requirement of $4.05 billion for producing natural gas from the ultra deep sea UD-1 discovery in the southern part of the KG-DWN-98/2 block.

Sources said UD-1 is being planned to be developed separately and together with the NDA fields, ONGC's total spending would be in the region of $10 billion.

Sources said ONGC has so far drilled a total of 13 exploratory wells in the 7,294 sq km block, which is divided into northern and southern appraisal areas.

The Northern Discovery Area (NDA) consists of the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in water depths ranging from 594 metres to 1,283 metres. The Southern Discovery Area consisting of the UD-1 discovery falls in ultra-deepwater with a depth of 2,841 metres.


Finance, labour ministries lock horns on investing EPF money in stocks

New Delhi: Whether or not a part of an estimated Rs5 lakh crore of employees provident fund (EPF) should be invested in the stock markets has become a bone of contention between the ministries of labour and finance, reports PTI.

While the finance ministry wants the labour ministry to work on investing about 15% of the Employees' Provident Fund Organisation (EPFO) money in stock markets for better returns without taking the issue to the PF trustees, the latter has decided to do otherwise.

Whereas the EPFO commands a corpus of Rs3 lakh crore, other provident funds, which follow the fund's investment pattern, have another Rs2 lakh crore.

In a letter to labour secretary P C Chaturvedi, finance secretary Ashok Chawla referred to the changes by EPF schemes earlier without any discussion in the Central Board of Trustees (CBT) and said, "It (labour ministry) can take a similar view on the issue of investment pattern."

However, the labour ministry has forwarded the letter to EPFO to take a view on the matter.

CBT is an apex decision making body for EPFO and is likely to meet on 10th September to take up the issue.

The finance ministry wants the labour ministry to follow investment pattern notified by it, which provides for up to 15% of the corpus in stock markets.

However, CBT's advisory body Finance and Investment Committee (FIC) yesterday stuck to its stand against investment of EPFO money into stock markets — either in shares or indices.

In his letter, Mr Chawla sought to remind the labour ministry that it used to adopt the investment pattern notified by the ministry of finance for many years.

"However, the ministry of labour has not adopted the investment pattern notified by the ministry of finance in January, 2005 and November, 2008 and investment pattern of the labour ministry continues to be the same which was earlier notified in July, 2003," the letter said.

Favouring the stand of no investment in stock markets, EPFO said at the FIC meeting yesterday that while investment in stock markets is subject to market volatility, "there is no risk of capital erosion in the case of EPF investments."

It also countered the finance ministry's claim that the New Pension System (NPS), which has an option to invest in stock markets, is giving better returns than EPF.

The finance secretary said in his letter that while NPS for central government employees could generate a weighted average investment return of 14.82% for the central government employees in 2008-09, EPF is giving only 8.5% returns to its subscribers for many years.

The EPFO has been giving 8.5% returns to its subscribers since 2005-06.

Countering Mr Chawla's views, EPFO said the income earned on EPF investments are actually realised, while the returns declared in NPS are notional and subject to market conditions.

This is so because, said EPFO, the returns generated under NPS are based on net asset value while the returns declared by EPFO are based on actual coupon received on its investments.


BlackBerry services face ban if no monitoring solution in 5 days

New Delhi: The government today made it clear that BlackBerry services may be banned if its maker, Research-in-Motion, fails to provide a monitoring solution in the next five days, reports PTI.

In a written reply to the Rajya Sabha, minister of state for telecom Sachin Pilot said, "In case no solution is provided, those services which can not be intercepted and monitored in readable format may be banned by the government."

The Department of Telecommunications (DoT) has instructed all telecom service providers to ensure that a technical solution for interception and monitoring of Blackberry services in readable format is made available to the law enforcing agencies by 31 August, 2010.

The minister's reply comes at a time when the security agencies and Canadian firm RIM are holding a crucial two-day meeting starting from today to decide the fate of Blackberry services in India.

The smartphone-maker, which has a subscriber base of one million in India, has been told in no uncertain terms that it must install its server with an Indian service provider.

On 12th August, the home ministry had demanded a technical solution by 31st August that would enable security agencies to peek into emails and chat messages sent via Blackberry Enterprises Server (BES) and BlackBerry Messenger (BBM).


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)