• ONGC’s crucial offshore rig conversion project facing further delays

    An age-old project of Oil and Natural Gas Corporation (ONGC), India’s state-owned petroleum explorer, that aims at converting oldest offshore rig Sagar Samrat to a Mobile Offshore Production Unit (MOPU) has been delayed again and is now likely to be commissioned by December this year, a status report by the Ministry of Statistics and Programme Implementation (MOSPI) showed.

    An ONGC executive confirmed the delay and added that the commissioning time had to be extended due to rains and the company, after terminating the original contract with Mercator last year, has now appointed United Arab Emirate (UAE)-based Gulf Piping Company to undertake the project.

    The project, crucial for raising output, has been delayed by 79 months so far and is facing cost overruns to the tune of Rs 715 crore, the report showed. The rig is proposed to be deployed in WO-16 cluster fields close to Mumbai High.

    The conversion of the off-shore rig Sagar Samrat was approved on March 2011 and was intended to be commissioned by May 2013 at an original cost of Rs 861.79 crore. ONGC had originally awarded the rig conversion project to Mumbai-based Mercator Ltd’s oil and gas subsidiary.

    However, that contract had to be terminated due to delays in execution. Post the award of a contract to Gulf Piping Company, ONGC had projected to commission the project by March 2019. The delay in deployment of MOPU has been one of the main reasons for the company’s shortfall in crude oil production for the financial year 2016-2017 and 2017-2018, according to a report by the oil ministry.

    ONGC has been under pressure from the government to arrest and increase its domestic crude oil production. Following the recommendations of a high-level committee headed by Niti Aayog Vice Chairman Rajiv Kumar, the company had to invite strategic partners to help enhance production from 64 fields.

    ONGC’s crude oil production in June this year declined 5 percent to 1,686 Thousand Tonne. Cumulatively, the oil and gas explorer’s domestic oil production during the first three months of the current financial year decreased 5 per cent to 5,137 TMT from 5,392 TMT produced in the corresponding period last fiscal.

    The company has managed to win 10 oil and gas blocks under the first three rounds of Open Acreage Licensing Programme (OALP).

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