Oil and Natural Gas Corp (ONGC) has challenged DGH's decision to disregard a major gas discovery off the Andhra coast, saying the upstream regulator's head V K Sibal had concurred with the MDT test that established in-place reserves of over 14 Tcf.
Sibal had on Tuesday stated that he had "disallowed" ONGC's gas discovery in an ultra-deep sea well in Krishna Godavari basin, as the company had abandoned the well without doing conventional testing.
ONGC said DGH's representative Sandip Kumar Gupta was present on the deep sea drill-ship 'Belford Dolphin' from December 9 to 15 when Straddle-packer MDT test was done and logs taken from well UD-1 to establish natural gas reserves.
"The conventional testing was not carried out, not because of well complications, as has been cited (by Sibal), but because it was not necessary," ONGC wrote to DGH in response the discovery in block KG-DWN-98/2 being disallowed.
The company in a similar letter to the oil ministry also stated that Sibal during a luncheon meeting with ONGC chairman R S Sharma on August 18, 2006 had accepted MDT as a conclusive testing methodology for establishing hydrocarbon reserves.
"The non acceptance of the discovery has come as a surprise and it is found difficult to comprehend the motive behind it," it said.
The company said it stood by its assessment of 2.09 to 6.73 Tcf initial in-place volumes in northern structure and 2.61 to 8.03 Tcf in the southern structure identified through the UD-1 well. "The in-place volumes for both the culminations range from 2.09 Tcf to 14.76 Tcf."
ONGC said in such deep water depths (2841 meters), a conventional test consumes 15 days against 8 hours per MDT thus allowing multiplicity of the test in a given zone. "A conventional test validation is not necessitated when mini DST technique gives us the assurance that hydrocarbons can be produced at surface at commercial rates."
Straddle-packer MDT is technically acceptable as conclusive testing methodology and provides sufficient information to establish a discovery and assess its potential commerciality, it said.
The ONGC letter pointed out that DGH had on January 2 accepted UD-1 as a discovery based on Straddle-packer MDT and date of conslusion of the test i.e. December 15 as the date of discovery and the DGH letter asked ONGC to submit notice for potential commercial interest of the discovery within 60-days.
Subsequently, on February 19, DGH disallowed the discovery.
"The well UD-1 was abandoned as per Industries Standard practice with a provision for re-entry by placing corrosion cap, so that it is possible to take production at a future date.
"... the well was under control and the decision to abandon was taken after fulfilling all the objectives of the well. The drilling complication and loss of fish are natural operational hazards. This is a Wild Cate well in frontier ultra deep water areas. The complication is definitely not due to any negligence or lack of planning," ONGC said.
On preferring DST test to conventional testing, ONGC said Straddle packer MDT based mini DST definitely establishes movement of hydrocarbons which can be recovered at surface and it obtained all the parameters that could be traditionally obtained from conventional testing.
source news : economictimes.indiatimes.com
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