BG earmarks US$140 million for Panna expansion

The offshore Panna oil and gas fields - off the coast of Mumbai - are about to get a US$140 million shot in the arm.

The British Gas Group (BG) - along with local partners Oil and Natural Gas Corp (ONGC) and Reliance Industries Ltd (RIL) - will be using the investment to expand current production and seek out new reserves.

BG and Co hope that - by investing in this expansion program - they can reach a target of a gross incremental recovery of 18 million barrels of oil and 74 billion cubic feet of gas. As part of the expansion, BG will construct - and install - two new wellhead platforms - with all the necessary infield pipelines - that will be connected to existing processing and compression facilities.

BG will be putting out a construction tender to build the new facilities in April this year. The expanded drilling program will begin in the second quarter of 2005 and will include six horizontal wells from one platform and five horizontal wells from the other. First production is expected in the third quarter of the same year.

BG has a 30% stake in the Panna-Mukta oil and gas and Tapti gas fields. ONGC has a 40% share and RIL holds the balance.