ONGC hits 52-week high on commencement of oil production from deep-water block in KG basin

Shares of state-owned Oil and Natural Gas Corporation (ONGC) Limited hit a fresh 52-week high of ₹220.3 apiece on BSE on Monday, January 8, after the company announced that it has officially started producing "First Oil" from the deep-water block in Krishna Godavari (KG) basin.

With commencement of the production from the KG-DWN-98/2 Block off the Bay of Bengal coast on Sunday, ONGC is completing Phase 2, the firm said in a filing to the stock exchanges.

The flagship project is progressing as scheduled, with the final phase expected to conclude by June 2024.

Subsequently, there will be a gradual ramp-up towards achieving the planned peak production of 45,000 barrels of oil per day (bopd) and 10 MMSCMD of gas from the deep-water KG-DWN-98/2 Block.

Earlier in November, the management of state-run upstream oil explorer told analysts in a call that the firm expects to commence oil production from the KG basin in November 2023 and gas from May and June 2024.

The management also stated that the company is exploring two petrochemical projects involving investments worth ₹1 lakh crore through the Joint Venture mode.

In December, the company's Chairman Arun Kumar Singh at the 28th UN Climate Change Conference in Dubai, stated that ONGC, under its ambitious decarbonisation programme, intends to transport green electricity to its installations in the Arabian Sea.

This move aims to substitute the use of natural gas in the operation of oil wells.

India's leading oil and gas producer has significantly reduced gas flaring, the combustion of methane gas produced during oil extraction. The company is committed to further minimising gas flaring, aiming to eventually eliminate it entirely in alignment with its environmental commitments.

Shares of ONGC were trading 0.79% higher at ₹218.1 apiece on BSE at 9:36am.