The Indian oil and gas production company Oil and Natural Gas Corp (ONGC) has completed the acquisition of an 80% stake in a block owned by the Gujarat State Petroleum Corporation (GSPC) in the Krishna Godavari Basin (India) for Rs 7,738 crore (US$995m).
The transaction had been announced in December 2016 and included the NELP-III Block KG-OSN-2001/3 block, where the Deen Dayal West (DDW) gas field is located, along with acquisition rights for discoveries other than DDW in the block. GSPC will retain a 10% stake in the block, while Jubilant Offshore Drilling will won the remaining 10% stake.
So far, GSPC has made 9 gas discoveries in the Bay of Bengal block, of which three - namely KG-08, KG-15 and KG-17 (known as DDW fields) - have been approved for development. The Deen Dayal West Field started trial gas production in 2014 and commercial production in April 2016. However, the project has been hit by cost overrun from US$2.75bn to US$3.41bn and DDW production started at a much slower than expected pace (less than 20 mcf/d, i.e. 0.6 mcm/d, compared to a targeted commercial production of 200 mcf/d, i.e. 5.6 mcm/d).