News Oil & Gas

State oil companies see output rebound in fields abroad

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Output from Indian state firms’ oil and gas fields overseas is rising again after falling for four straight years as ONGC Videsh’s (OVL) projects in Russia and South Sudan have nearly normalised after severe disruptions last year.

The oil and gas output has risen to 8.3 million metric tonnes of oil equivalent (mmtoe) in the April-August period from 8.1 mmtoe in the same period last fiscal year. The annual output had reached a peak of 24.7 mmtoe in 2018-19 following the purchase of stakes in Russia’s Vankor field by Indian state-run firms in 2015 and 2016. The output started declining in 2019-20 and had dropped 21% by 2022-23 as fields matured, producer cartel OPEC+ took voluntary production cuts, and geopolitics throttled output in a Russian field last year.

“Our Russian operations were severely affected by the Russia-Ukraine conflict. The operator in Sakhalin -1, one of our largest projects, decided to exit the project and the production dropped to almost zero level,” ONGC Videsh said in an emailed response to ET. “South Sudan, where we have two projects, GPC and SPOC, suffered unprecedented floods, which closed down both of our projects,” it added.

Sakhalin- 1 output has now almost reached the pre-conflict level while South Sudan projects are also producing at pre-flood levels, the company said, adding that new wells in Latin America and the limited impact of voluntary supply curbs by OPEC+ will help OVL boost its overseas output this year and sustain it for a couple of years. OVL, a subsidiary of state-run ONGC, invests in overseas fields.

OVL is drilling new wells in Colombia and opening the wells that were shut by floods in South Sudan.

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