ONGC: Mumbai High Is 50 Now, Iconic Oil Field’s Natural Decline Is Inevitable
The Bombay High was discovered a year before Sholay was released, and both were considered iconic by then-Prime Minister Indira Gandhi. She recalls her father, Jawaharlal Nehru, asking the Planning Commission to allocate aside cash for ONGC’s oil exploration.
Nehru even told the young ONGC engineers not to let him down. The ONGC was created in 1956. And, while it discovered oil onshore within a few years, it couldn’t consider offshore prospects until a decade later. ONGC began offshore surveys off the Gujarat coast in the late 1960s, eventually discovering oil and then gas in the Arabian Sea in 1974.
It now produces 133,000 barrels of oil per day and 10 million cubic metres of petrol. That represents 35% of India’s oil production and 18% of its gas production. Even after half a century of continuous production, the Mumbai High field remains strong, with an annual drop rate of less than 4.5%, compared to international averages of 8-10% for fields of similar size and age.
ONGC continues to bet big on Mumbai High, as seen by its massive expenditure investment for the redevelopment projects. At a recent energy conference, ONGC Chairman and CEO Arun Kumar Singh voiced hope for the discovery of a new field similar to Mumbai High in the near future. Two years ago, ONGC announced intentions to invest more than $500 million to increase hydrocarbon output at its flagship asset, Mumbai High.
According to various reports, ONGC is now grappling with issues such as difficult geology, insufficient prospective data, and Ministry of Defence limitations, which have impeded exploration operations. Furthermore, the Finance Ministry’s fiscal policies, which include various taxes like as service tax, VAT, and GST, discourage exploratory endeavours, particularly among new participants in the industry. The demand for a favourable fiscal environment to stimulate exploratory efforts is underlined throughout the industry.
