India’s ONGC raises investment in Shwe gas project

India’s Prime Minister Shri Narendra Modi has confirmed that ONGC Videsh Ltd, the overseas arm of Indian national oil company Oil and Natural Gas Corporation Ltd will invest more than US$121 million to produce more gas off the coast of Rakhine State.

The investment, which was approved by the Indians on June 24, will go towards drilling new development wells at Block A1 and A3 of the Shwe natural gas project in the Bay of Bengal, at water depths of 110 meters.

Prior to this, ONGC Videsh had already invested $722 million in Shwe. The company first picked up a stake in Shwe in 2002. The additional investment will give it a larger stake in the gas field.

The projects is currently being developed in three phases by a consortium of six companies led by SOuth Korea’s POSCO International, which has a 51 percent stake. The other investors are ONGC Videsh with a 17pc stake, Myanmar Oil and Gas Enterprise with a 15pc stake, as well as Gas Authority of India and Korean Gas Corporation, which both hold an 8.5pc each in the project.

Gas was first achieved at Shwe in July 2013 and was soon producing more than 700 million cubic feet of gas a day. But volumes have declined and the project now produces around 630 million cu ft, 80pc of which is sold to China while the remaining is consumed locally.

The additional investment by ONGC Videsh is expected to boost production and offset that decline. It slao aligns with India’s Act East Policy.

Shwe is a 35-year project with a remaining 29-year term. Commercial drilling has already started in Block A1, and will commence at A3 in 2025, said U Win Nyunt Aung, production engineer at POSCO International Myanmar. – Translated

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