Oil and Natural Gas Corporation Limited (ONGC), India’s flagship oil exploration. And production company, has recently made two new oil discoveries in the Bay of Bengal. In this blog, we will discuss these two new discoveries and their impact on the nation’s energy security and economic growth.
ONGC’s Role in India’s Energy Sector
ONGC was established in 1956. Since then ONGC has played a pivotal role in meeting India’s energy demands. By exploring, producing, and refining oil and natural gas resources. ONGC is involved in multiple onshore and offshore projects. And manages several rigs and platforms that utilize modern tools and systems for the production of hydrocarbons.
The company’s efforts have been crucial in reducing India’s dependence on imported energy, increasing its production capacity, and attracting new investors to invest in stocks online.
Recent Oil Discoveries by ONGC
ONGC has discovered two new natural gas reserves in the Mahanadi basin by achieving results in its high-risk deepwater exploration.
The discoveries were made in the MN-DWHP-2018/1 block. Which was earlier marked as a ‘no-go’ zone because of national security concerns. The MN-DWHP-2018/1 block was acquired by the company in. The third round of auction under an open acreage licensing policy in 2019.
The first discovery is named the Uktal which is located at a depth of 714 meters while the other is located at 1,110 meters. During the initial testing, the Utkal produced more than 3 lakh cubic meters of gas per day.
Key Details of the Discovery
- Location and Scope: The oil has been extracted from Block 98/2 of Krishna Godavari basin. Which is 30 km off the coast of Kakinada in Andhra Pradesh. This new discovery in the Krishna-Godavari Basin is a turning point in. The Indian energy sector and will lead to a significant rise in ONGC share price.
- Operational Status: At the beginning of this year. Only four wells out of 26 are in service, but the number is projected to grow soon.
- Production Capacity: Union Petroleum Minister Hardeep Singh Puri has said the production is expected to touch 45,000 barrels per day. And will contribute to about 7 percent of India’s total production of crude oil in 2024.
- Project Phases: The project is almost at the end of Phase 2, with Phase 3 focused on achieving peak oil and gas production.
- Impact on ONGC’s Production: It is estimated that this project will add 11% to the total oil production and 15% to gas production.
Impacts of the New Discoveries on Energy Security in India
The recent oil discoveries by ONGC have profound implications for India’s energy security and economic stability.
- Energy Security: India is the third-largest importer and consumer of oil in the world, thus it relies heavily on global markets for fulfilling its crude oil demands. This new discovery is a significant step in India’s journey towards self-reliance in energy and reduces dependency on imported oil.
- Economic Implications: The successful extraction and production of oil in the Krishna-Godavari Basin has boosted India’s position in the global market and strengthened its energy security.
- Economic Growth: An increase in domestic oil production leads to economic growth. By creating employment, generating revenue for local governments in the oil-producing area. And boosting the downstream industries such as refining, petrochemicals, and manufacturing.
- Foreign Exchange Savings: Reduced oil imports lead to significant savings in foreign exchange expenditure. Which can be redirected towards infrastructure development, social welfare programs, and other national priorities.
- Resilience Amid Challenges: These new discoveries exemplify India’s spirit of adaptation to global challenges, like the COVID-19 pandemic. That caused some delays in this project which was initially started in 2016-17.
The Bottom Line
ONGC’s recent oil discoveries mark a significant milestone in India’s quest for energy security and self-reliance. By expanding domestic oil reserves, reducing import dependency, and supporting economic growth. ONGC plays a pivotal role in shaping the nation’s energy landscape.
