New Delhi : State-owned Oil and Natural Gas Corp (ONGC), the biggest beneficiary of near doubling of gas price from $4.2 to about $8 per million British thermal unit from April, said it will gain an additional Rs 16,000 crore in revenue because of the new price, which may not be enough to make all its discoveries viable.
“Right now we are importing gas at $15/mBtu plus for LNG (liquefied natural gas), there is no justification for domestic gas not to be produced if the cost of production is lower than that,” the company’s Chairman and MD Dinesh K Sarraf said at his first interaction after he took over as ONGC head. However, most of this additional revenue would flow back to the government in form of higher taxes, royalty and dividend. Sarraf said the higher gas price will make many of its gas discoveries on the eastern offshore viable. “Our prolific KG-DWN-98/2 block will be now viable.” The KG-DWN-98/2, which lies close to Reliance Industries’ dwindling KG-D6 block and where gas finds were made more than a decade back, will produce 25-30 mmscmd of gas beginning 2017, he said.
“In Mahanadi basin, we have 26 billion cubic metres of gas (less than one trillion cubic feet) reserves which are viable to be produced only if the price is $11,” he said.
Meanwhile, ONGC Videsh Ltd is likely to offer US-based Liberty Resources stake in Imperial Energy, which it acquired in 2009, D.K. Sarraf said. Liberty Resources will help Imperial Energy to explore shale oil and gas in the latter’s
asset in Western Siberia.