ONGC Videsh arm hopes for a turnaround with hike in Russian field output

Topics ONGC | ONGC Videsh | oil field

OVL’s total oil production in FY21 stood at 8.51 mt and gas output was 4.529 bcm, down from 9.755 mt and 5.226 bcm, respectively, in FY20.
Imperial Energy, a subsidiary of ONGC Videsh (OVL), is expected to increase its output from the Snezhnoye oil field in Russia. This has been possible because of an Associated Petroleum Gas utilisa­tion plant commissioned in 2020.

According to officials in the know, completion of this project and the agreement with the Transneft pipeline network for supplying gas are going to boost prospects for Imperial Energy.

The utilisation plant has been built at a cost of $50 million.

“Based on estimates of the wells closed earlier, production is expected to increase by 1,000 barrels of oil equivalent per day (boepd) and drilling of two wells will increase the production by another 2,000 boepd,” an official told Business Standard.

In 2015, OVL started to set up this utilisation plant to extract the heavier components from Associated Gas and make value-added products. It was envisaged that oil and gas production from the Snezhnoye oil field would increase, while emission would be reduced through this plant. Imperial Energy wanted to make propane-butane (popularly known as LPG), condensate, and pipeline quality lean gas. It was also looking for a pipeline network to supply the increased gas output that was planned.

“The lean gas would be supplied to the Transneft pipeline network. The high gas content wells, which were closed, can now be put on production,” an official told Business Standard.

Among other things, benefits from the Associated Petroleum Gas utilisation plant include avoiding the gas emission charges imposed by the Russian government. “Without the plant, the development of Snezhnoye field would not have been feasible as the wells would have to be closed to avoid gas flaring, and emission charges,” said the official.


OVL had acquired Imperial Energy for $2.1 billion on January 13, 2009. It is currently exploring and producing hydrocarbons thr­ough two subsidiaries (Nord Imp­erial LLC and Allianceneftegaz LLC) located in the Tomsk region of Western Siberia. Imperial Energy’s current interests comprise 10 blocks that are 100 per cent owned by the company.

During the financial year 2020-21, Imperial Energy’s oil production stood at 0.164 million tonnes (mt), while gas production was at 0.039 billion cubic metres (bcm). This is down from 0.196 mt oil and 0.045 bcm gas in the financial year 2019-20. OVL’s total oil production in FY21 stood at 8.51 mt and gas output was 4.529 bcm, down from 9.755 mt and 5.226 bcm, respectively, in FY20.

The project faced flak after it was found that OVL had made unrealistic estimation of reserves and production before acquiring this project. Apart from Imperial, OVL has two other assets in Russia—Sakhalin and Vankor.


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