ONGC Commences Oil Production from KG Basin’s Cluster-2 Project, Eyes Output Reversal

State-controlled Oil and Natural Gas Corporation (ONGC) has initiated oil production from its long-anticipated Cluster-2 project in the Krishna Godavari basin in the Bay of Bengal, marking a pivotal moment for the company as it aims to reverse years of declining output. The Cluster-2 project, situated in the KG-DWN-98/2 block, has officially begun production, with ONGC set to gradually increase its output.

Oil Minister Hardeep Singh Puri highlighted the significance, stating that the “first oil production commences from a complex and difficult” block. Although the current output was not specified, the anticipated production is expected to reach 45,000 barrels per day and over 10 million standard cubic metres per day of gas.

The commencement of Cluster-2 oil production faced delays due to the impact of the Covid-19 pandemic, with initial expectations set for November 2021. ONGC has enlisted the services of the floating vessel Armada Sterling-V, co-owned by SPOG (Shapoorji Pallonji Oil & Gas) and Malaysia’s Bumi Armada, to extract oil from beneath the seabed.

Located 35 kilometers off the coast of Andhra Pradesh, the KG-DWN-98/2 block contains multiple discoveries grouped into clusters. Cluster 2, the first to undergo production, consists of two blocks, 2A and 2B, contributing to ONGC’s efforts to revitalize output in the region. The estimated production figures for Cluster 2 have been adjusted to 45,000 bpd of oil and associated gas, signaling a strategic move for ONGC in the evolving energy landscape.