OIL in the process of drilling wells in KG basin

Reports suggest that by the middle of 2013, Oil India (OIL) may start work on drilling wells in the KG Basin.

OIL is said to be in advance stage of mobilising the rigs to the exploration site and the work is expected to by June-end or early July 2013.

As part of its plan, the firm would drill three shallow wells and three deep water wells at a total cost of around Rs 1,000 crore depending on the geological complexities.

The high pressure high heat (HPHT) wells at higher depth would be more costly compared with shallow wells, reports suggest.

Along with its partner GeoGlobal Resources from Barbados, OIL has a commitment to drill 12 exploratory wells in the 549 sq km block on the eastern coast of India. OIL won the block at the NELP VI auction and is the operator of the block with 90 per cent interest.

The remaining 10 percent stake is held by GeoGlobal Resources. The year 2013 may see active participation by oil exploration companies like ONGC, GSPC and OIL to meet the growing requirement for domestic gas, which has been largely unfulfilled after the output of Reliance Industries (RIL) operated KG D6 fields fell drastically.

OIL has six other blocks in the Krishna Godavari basin in which it holds between 10-30 per cent interest. Overall, the company has around 40 exploration blocks, which includes 10 blocks awarded under NELP XI.

The company has planned a capex of around Rs 3,180.30 crore for exploration and development of existing acreages.