ONGC Moves Towards Open Acreage Regime
ONGC Moves Towards Open Acreage Regime
ONGC (Oil and Natural Gas Exploration)Limited has started moving towards an open acreage regime for the exploration of hydrocarbon. The public sector company has begun drilling its first well in the Palar Basin in Tamil Nadu. This site is about 40 km north of Chennai. This location has been chosen with scientific accuracy. The site of the drilling is surrounded by mango trees.
The drill bit will be boring into the earth looking for natural resources that can power the country's growth. Drilling wells is the way in which the oil company can find precious resources beneath the earth's surface. This is the first well in the PR-ON-2005 /I block that ONGC has won in the seventh round of auctions in the year 2005. ONGC employees are particularly hopeful because the Palar basin is in the middle of two regions known for their natural resources namely the Cauvery and Krishna-Godavari basins.
Opening up specific areas and obtaining hydrocarbons from sources such as high pressure, high temperature reservoirs, hilly areas and deep seas is the aim of ONGC as it is targeting growth in production capacity. The public sector oil major is seeking to produce 130 million tonnes of oil and oil equivalent gas by the year 2030 from 60 mt today.
The Rs, 165,000 crore public sector oil company is aiming for an increase in the amount of oil production and making sizeable profits. ONGC looks forward to the open acreage system of hydrocarbon exploration. For the previous 15 years, this public sector oil company had been following a system wherein government auctions were being held for the blocks.
In 9 rounds of auctions so far, 302 blocks have been released for exploration. Only 6 have yielded good reserves so far though there have been 128 discoveries. In the past 16 years, around $15 billion has been invested in this sector. ONGC is now looking forward to the open acreage system.
ONGC's Director-Exploration Narendra Kumar Verma has discussed how ONGC has a clear idea of the sedimentary basins and it is looking for a jackpot in terms of hydrocarbon reserves.
There are many benefits of opting for bydrocarbons as against fossil fuels. Ecological risks such as depletion of ozone, contamination of air and water as well as global warming are mitigated if hydrocarbons replace fossil fuels. Scientists are now looking for alternatives to fossil fuels. Hydrocarbons are a good source of energy and they do not damage the environment.
Open acreage system offers greater freedom to ONGC when it comes to taking care of the needs of India's public sector company. ONGC can now look forward to better finances. Having good financial resources at their disposal will make the company function more effectively.
Another positive impact of the open acreage system is that public sector companies like ONGC now have the opportunity to drill for wells in any location with much more ease and flexibility.
For nurturing the health of the public sector companies in the oil and gas sector, the government could also look at concentrating on renewable energies such as hydrocarbons obtained from green plants as opposed to traditional hydrocarbon obtained from fossil fuel reserves.
