New Delhi: Prime Minister Narendra Modi on Monday said that state-run Oil and Natural Gas Corporation’s (ONGC) achievement in producing first oil from its Krishna-Godavari deepwater block with estimated peak production of 45,000 barrels of oil per day is a “remarkable step in India’s energy journey” and it will boost the government’s Aatmanirbhar Bharat mission.

“This is a remarkable step in India’s energy journey and boosts our mission for an Aatmanirbhar Bharat,” Modi said in a post on X, formerly Twitter, adding that it will also have several benefits for the country’s economy.

First oil production has commenced from the “complex and difficult” deepwater KG-DWN-98/2 block, situated off the coast of Bay of Bengal, oil minister Hardeep Singh Puri said. Besides oil output, over 10 million cubic metres of gas per day is expected from the block, he said. “This project is expected to add 7% to current national oil production and 7% to national natural gas production,” Puri added.

“As India powers ahead as the fastest growing economy under leadership of PM @NarendraModiJi, our energy production is also set to rise from the deepest frontiers of #KrishnaGodavari,” Puri said on X.

Announcing the development, ONGC said: “With commencement of this First Oil on 7 January 2024, ONGC is nearing completion of Phase 2, culminating into commencement of oil production from the ‘M’ field of KG-DWN-98/2.”

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“This 98/2 project is likely to increase ONGC’s total Oil and Gas production by 11% and 15% respectively,” the public sector explorer said in a statement. “Valiantly combating various technological and Covid-related challenges, ONGC had successfully executed Phase 1 of the project in March 2020, achieving the commencement of gas production from U field of the KG-DWN-98/2 Block in record time of 10 months,” it added.

According to the company, the development of this field faced unique technical challenges due to the waxy nature of the crude. To overcome those, it employed the innovative ‘Pipe in Pipe’ technology, a first-of-its-kind initiative in India.

“While some sub-sea hardware involved in this development has been sourced internationally to meet specific requirements, the majority of fabrication works were carried out at modular fabrication facility at Kattupalli which highlights ONGC’s commitment to promote ‘Make in India’, contributing towards a self-reliant energy sector in India,” it said.

The flagship project is on track with the final phase of the project with the balance oil and gas fields of the block scheduled to be put on production by mid- 2024, it said. “Peak production of field is expected to be 45,000 barrels of oil per day (bopd) and over 10 MMSCMD [million metric standard cubic meters per day] of gas,” it said.

According to a company executive who did not wish to be named, the Block KG-DWN-98/2 is situated next to the Reliance Industries Ltd’s (RIL) gas field at the KG-D6 block, which is under commercial production for over a decade. The ONGC’s block was initially had an area of 7,338 square kilometres. Initially, Cairn Energy had acquired a 100% working interest in this deepwater block in April 2000 and sold 90% of its participating interest to ONGC in 2005 along with operatorship. Later, in 2012 ONGC acquired balance 10% from Cairn to have 100% participating interest. The production sharing contract (PSC) with the government for the KG-DWN-98/2 block was signed on April 2000.