Sluggish Progress for ONGC Assam Renewal Project

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Researched by Industrial Info Resources (Delhi, India)--Oil & Natural Gas Corporation Limited's (BSE:500312) (ONGC) $555 million Assam Renewal Project is progressing at a slow pace and is facing a massive delay in the completion of the project, which is only 30.86% complete, compared to a target of 60.1% at this time.

On the construction front, the project registered a progress of 12.34% completion, compared to the scheduled 37.26%. In manufacturing, the progress was 31.43%, against a planned 64.39%. The contractor is going to face a multitude of problems meeting the completion deadline of March 2013.

The production facilities in the Assam asset are more than 20 years old, and they are not able to meet the statutory requirements in the present scenario. The prime objective of this project is to reverse the trend of declining production from the mature oil fields, where ONGC began its search for oil in 1957. The objective of the project is to sustain production through 2025, with a healthy environment and modern infrastructure. The focus is on enhanced efficiency, better safety standards and increased reliability of surface infrastructure to extract balance reserve until 2025.

Currently, the project is under way in one of the fields of ONGC's Assam assets. The project covers a total of 21 installations, which will be integrated into nine optimized installations.

The project scope includes the demolition of all nine group gathering systems, two effluent treatment plants, four water injection plants, a gas compressor and a captive power plant (CPP), as well as the reconstruction of five group gathering systems, two effluent treatment plants, two water injection plants and the installation of a centralized gas compressor plant and captive power plant.

The project was awarded to a consortium of Sai Rama Engineering Enterprises, Megha Engineering and Infrastructures Limited and Volgogradneftegazstroi on March 17, 2009.

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