ONGC to invest over Rs 4,600 crore in Andhra offshore and onshore gas project

Hyderabad: Oil and gas major Oil and Natural Gas Corporation Limited (ONGC) will invest more than Rs 4,600 crore to drill 10 development wells, set up two unmanned platforms, lay an offshore pipeline, and establish an onshore gas processing facility in Konaseema district of Andhra Pradesh. According to the minutes of a meeting held on July 24 by an Expert Appraisal Committee (EAC) under the Ministry of Environment and Forests, ONGC has approached the ministry seeking fresh environmental clearance for the proposed project.

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Letter of Award (LOA) for Offshore Oil and Gas Contract areas KG/OSDSF/CHANDRIKA/2021 (Chandrika), comprising an area of 697 sq km, and KG/OSDSF/GS49/2021 (GS49), comprising 148 sq km in the east coast, were issued by the Directorate General of Hydrocarbons (DGH) in September 2022 under DSF-III (Discovered Small Field-III).

Project details and cost

“Total land area required is 26.3 hectares (Odalarevu Terminal) for the proposed installation. Greenbelt will be developed in a total area of 8.7 hectares, i.e., 33 percent of total project area. The estimated project cost is Rs. 4,606.35 crores,” the EAC said.

“Capital cost of EMP (Environmental Management Plan) would be Rs 14 crores and recurring cost for EMP would be Rs 3 crores per annum. Industry proposes to allocate Rs 14 crores towards Extended EMP (Corporate Environment Responsibility),” it added.

Employment potential

A development well is drilled in a proven area to produce oil or gas, after exploration and appraisal drilling confirm the presence of commercially viable reserves. The project is expected to generate direct employment for 150 people and 310 indirect jobs.

EAC deliberations and recommendations

The proposal was earlier considered by the EAC during its February meeting, when the panel deferred the proposal and sought certain requisite information and inputs from ONGC.

In its latest meeting, the EAC again deferred the proposal, asking for additional information. Among other recommendations, the committee advised the PSU to conduct a comprehensive biodiversity assessment to evaluate the impact of drilling activities and to prepare an environmental restoration action plan, with a dedicated budgetary allocation for its implementation.

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