India’s state-owned international player ONGC Videsh (OVL) has reportedly failed to deliver the gas giant that it was targeting with the Kanchan wildcat on Block SS-04 in neighbouring Bangladesh.
OVL had drilled Kanchan-1 exploration well to a sub-surface depth of around 4200 metres but failed to discover commercial volumes of gas, the Financial Express reported quoting a senior official with national oil company Petrobangla.
"The company could find only huge deposits of clay and shell-stone [sic] sequence during the drilling in absence of sandstone, meaning there is no gas reserve prospect there," he said.
The long-delayed Kanchan probe is located on the small onshore part of the mostly shallow-water Block SS-04 production sharing contract.
OVL is said to be deciding whether to abandon this well or continue drilling to another horizon. Kanchan had been touted as having 1 trillion cubic feet of gas potential.
The commitment wildcat had been a long time coming with OVL originally hoping to spin the drill bit after the 2018 monsoon season. However, that plan was derailed due to a tax dispute with the Bangladesh authorities and issues over demurrage for imported equipment.
The coronavirus pandemic subsequently brought further delays and Petrobangla ultimately extended the PSCs for OVL’s blocks SS-04 and SS-09 until February 2023 so that the operator could fulfill its exploration obligations.
Even the eventual Kanchan drilling operation was not without its own drama. Logging tools got stuck downhole with several weeks and drilling contractor, China’s Sinopec, had to restart operations after they stalled, according to the FE.
Petrobangla had earlier extended by 24 months until February 2021 the PSCs for shallow-water blocks SS-04 and SS-09, which were awarded to OVL in 2014.
The Indian company has a 45% operated stake in the assets and its partners are compatriot Oil India Limited, also with 45% equity, and Bangladesh’s national upstream company Bapex on 10%.
Block SS-04 covers 7269 square kilometres while Block SS-09 is 7026 square kilometres in size. Water depths the blocks range between 20 and 200 metres.
The minimum commitment workscope comprises 2700 line kilometres of 2D seismic on each PSC and one exploration well on Block SS-04 and two wells on Block SS-09.
OVL has plans to drill the Moitree and Titly prospects on Block SS-09 after 2D seismic surveying highlighted their potential.
The Dhaka authorities are currently looking to appoint a consultant to evaluate and revise their PSC terms with the aim of making its offshore blocks more attractive to international upstream investors.
Bangladesh relies on costly imports of liquefied natural gas to help meet its burgeoning gas supply-demand gap.
Upstream has approached OVL for comment on its Bangladesh exploration campaign and plans.