VIJAYAWADA: Oil and Natural Gas Corporation (ONGC) chairman and managing director Shashi Sankar on Tuesday inaugurated the production of oil and gas for commercial purposes at the Early Production System (EPS) site near Bhavadevarapalli village of Nagayalanka mandal. Shankar said production at KG basin would be doubled by next year and added that ONGC has been paying a royalty of `352 crore to the State per year for onshore oil and gas exploration. ONGC plans to spend `35,000 crore for exploration and production works across the country this year.
“Efforts are on to increase production and reduce oil and gas imports. Production at Nagayalanka commenced in a record time with the cooperation of the State government,” the ONGC chairman said.
Meanwhile, Machilipatnam MP Konakalla Narayana Rao asserted that Andhra Pradesh should be prioritised as far as the distribution of oil and gas is concerned and urged that “special royalty” be paid to the State.
AP Bhavan resident commissioner Arja Srikanth, who was the chief guest of the function, said Chief Minister N Chandrababu Naidu himself had taken the initiative to ensure operations at Nagayalanka get environmental clearance. “Villagers of the region have extended their support for the success of the project,” he said and appealed to the ONGC to adopt 10 villages in the region for developmental works.
In the exploration stage, Nagayalanka field was operated by Cairn India which dug three wells, out of which two have gone dry.
The functional well has the potential to give 150 cubic metres of oil and 45,000 standard cubic metres of gas every day.The oil produced from the well will be transported to S Yanam in East Godavari district from where it will be moved elsewhere. The gas will be sold to Mega Engineering, RAK Ceramics, and Sentini Sanitaryware.
The second phase of drilling will be taken up once geological data gathered in the first phase is studied.
A total of `420 crore has been allotted for drilling three wells by March 2019.ONGC will spend `340 crore for the protection of the environment. In March 2015, the Ministry of Environment and Forest issued ‘Terms of Reference’ to the ONGC, allowing for the setting up of 31 wells in Krishna district.