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ONGC)will spend $4 billion to extract gas from in Krishna-Godavari basin  

New Delhi, July 14: State-run Oil and Natural Gas Corporation Ltd (ONGC) will spend $4 billion to extract gas from a block adjacent to Reliance’s rich gasfields in the Krishna-Godavari basin.ONGC will spend around $2.3 billion in capital investments in the deep-sea UD-1 discovery in the KG basin block and another $1.7 billion in operational expenses.The PSU oil firm has sent its investment plans to the director-general of hydrocarbons. ONGC has told the regulator that it estimates reserves of 3.4 trillion cubic feet in the KG basin. About 55 per cent of this is recoverable.

The actual reserves will be checked by the regulator before ONGC can make any claims openly. Reliance Industries Ltd has reportedly found around 20 trillion cubic feet of reserves in three discoveries in the same basin. Spread over 50,000 square kilometres off the Andhra Pradesh coast, the Krishna-Godavari basin is rich in natural gas. ONGC has a 65 per cent stake in the block, while Cairn India holds 10 per cent. Petrobras of Brazil has a 15 per cent stake, with Norway’s Statoil owning the remaining 10 per cent.

Petrobras and Statoil are, however, exiting the block to concentrate on finds back home. BP and Shell are believed to be looking at replacing them as investors.ONGC has drilled 13 exploratory wells in the 7,294 square km block in the basin, which is divided into northern and southern appraisal areas.Meanwhile, petroleum secretary S. Sundareshan today said upstream firms such as ONGC would pay about Rs 6,000 crore to retailers to make up for the losses they incurred on selling fuel below cost in the April-June period. Courtesy:THE TELEGRAPH

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