ONGC's Assam Projects Hit Roadblock

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Researched by Industrial Info Resources India (Delhi, India)--Government of India-owned enterprise Oil & Natural Gas Corporation Limited (ONGC) (BSE:500312) (New Delhi, India) seems to have a tough time with its ongoing projects in Assam. Investments of more than $25 million are stuck in various projects that are being executed by the oil-exploration major for the development of its assets spread across the various parts of the Northeast Indian state.

Slow progress of work has caused delays in the completion of various vital projects, which include four effluent treatment plants (ETPs) that are being developed at Rudrasagar, Geleki, Borholla and Khoraghat. Out of these, three projects involve simultaneous erection of Water Injection Plants.

Out of the planned implementation target of 6.5%, the project has made just 2.6% progress, while the progress on the engineering front stands at 1.8%, against the scheduled target of 4.5%. Manufacturing and delivery progress stands at 0.6%, against the scheduled target of 2.8%.

UEM India Private Limited (Noida, Uttar Pradesh) bagged the $19 million EPC contract for the construction of the facilities in March 2011. As per the terms of the contract, the construction of the projects was due to be started by April 2011, but these projects were actually kicked off in June 2011. This delay may push back completion of the project, which is scheduled for January 2014 as per the contract.

The third-party inspection contract for the project was awarded to RINA, a certification agency on December 2011, and the orders for major items were placed on Laksel EPS Technologies Pte Limited (Singapore) in November 2011.

ONGC's network of surface facilities in Assam spans 22 group-gathering stations, three central tank farms, eight gas collection plants, two enhanced oil recovery facilities, three captive power plants and nearly 2,500 kilometers of pipelines. This network of facilities is connected to 612 producing wells and 150 water injection wells.

ONGC's first discovery in Assam was the Rudrasagar field in the Sivsagar district. Since 1960, ONGC has made 34 oil and gas discoveries in Assam, generating 786 million tonnes (mt) of in-place oil and oil equivalent gas reserves. This original-oil-in-place (OIIP) of Assam of 786 mt has an ultimate recoverable reserve of 235.95 mt, out of which 78.68 mt has already been produced, leaving a balance of 157.27 mt.

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