Page 5 - AsianOil Week 35 2021

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been hamstrung by the government’s reluctance factors. The company is of the opinion that it is
to abolish price controls on gas production from not prudent to venture into this business at this
fields that were awarded to ONGC and state-run juncture,” ONGC said.
Oil India Ltd (OIL) on a nomination basis. As the company looks to streamline its
upstream operations, it has also begun looking
Price pressure at ways to support its oil and gas operations with
The Ministry for Petroleum and Natural Gas’ renewable energy projects.
Petroleum Planning and Analysis Cell (PPAC)
announced on March 31 that prices for these What next
nomination blocks, which deliver the bulk of The company said in its annual report that it was
India’s domestic gas production, would remain considering developing wind farms at its fields in
unchanged the six months from April 1 at $1.79 the Arabian Sea and Bay of Bengal.
per mmBtu ($49.51 per 1,000 cubic metres). “A study for a pilot project in offshore wind
ONGC has repeatedly complained that the has already been commissioned for assessing
rate, the lowest level in a decade, is far below its the opportunities in this niche segment,” ONGC
breakeven point and renders most of its produc- chairman Subhash Kumar Kumar said.
tion uneconomical. He said: “We added another 6 MW of
New Delhi sets domestic gas prices every six solar capacity taking our total installed capac-
months using the weighted average price of gas ity (of solar energy) in excess of 30 MW. Our
at hubs in the US, Canada, the UK and Russia. total installed capacity in renewable space has
These tariffs are also set at a three-month lag to exceeded 325 MW and... we have a long distance
prevailing market rates at those hubs and come to cover as we are targeting 10 GW of installed
with a built-in $0.50 per mmBtu ($13.83 per renewable capacity by 2030.”
1,000 cubic metres) discount to the international While the company is looking towards the
average. energy transition, in the nearer term the majority
ONGC has complained that this approach of its efforts will focus on bolstering its domestic
is illogical because it uses an average price set at upstream operations.
gas-rich hubs to determine rates in a gas-poor The state major has been under pressure
market. from the government to improve its production
Low prices have forced the company to walk of both oil and gas, and while there are no clear
away from an underground coal gasification signs of the ONGC achieving the former, KG-D5
(UCG) project it had been working on for more represents a major step forward for the compa-
than a decade. ny’s gas ambitions.
ONGC said in its annual report on August 30 Gas production is soaring from Reliance
that it was ending research and development on Industries Ltd (RIL) and BP’s neighbouring
a pilot project located on the Gujarat Industries deepwater KG-DWN-98/3 (KG-D6), which has
Power Company Ltd’s (GIPCL) Vastan coal ten- seen several discoveries brought on stream since
ement in Gujarat. December last year.
“Processing of gas at surface shall be a Indeed, financial services provider HDFC
challenge, as syngas has many impurities and Securities has predicted that new production
contamination. Non-availability of business from the Krishna Godavari (KG) Basin’s deep
partners from coal/chemical/power sectors for waters could boost the country’s output from
business eases during pilot/commercialisation, 78.54 mcm per day in fiscal year 2020-2021 to
along with the current gas price scenario, are 122 mcm per day by 2024.™

Week 35 02•September•2021 www. NEWSBASE .com P5