Oil and Natural Gas Corp. Ltd. (ONGC) is focusing on the unexplored deep waters of Andaman Nicobar basin, India’s frontier zone that lies between hydrocarbon producing fields in south Myanmar and northwest Indonesia.

The state-run explorer plans to launch a new exploration campaign to drill as many as 18 wells in six deepwater blocks in the Andaman basin with an estimated investment of about US $1 billion. The six blocks are AN-DWN-2009/1, AN-DWN-2009/2, AN-DWN-2009/3, AN-DWN-2009/5, AN-DWN-2009/13, and AN-DWN-2009/18.

The exploration program includes drilling three exploratory wells in each of the six blocks that are located in water depths between 2,795 m (9,170 ft) and 3,420 m (11,221 ft) on the east and west sides of Andaman and Nicobar islands.

In a proposal submitted to the federal environment ministry for environmental clearance, ONGC said that it would drill each of the 18 wells in six blocks to a depth 6,000 m (19,685 ft). The investment in each block is estimated to be about US $163 million.

The locations of the wells to be drilled in the six blocks have been identified. The operator would drill three exploratory wells in water depths of 2,795 m (9,170 ft), 2,820 m (9,252 ft), and 2,850 m (9,350 ft) in AN-DWN-2009/1, which is spread over an area of 4,981 sq km (1,908 sq miles). It is located about 224 km (139 miles) away from the west Andaman coast.

The company would drill the same number of exploratory wells in AN-DWN-2009/2 (3,995 sq km, or 1,543 sq miles), AN-DWN-2009/3 (3,992 sq km, or 1,541 sq miles), AN-DWN-2009/5 (4,002 sq km, or 1,545 sq miles), AN-DWN-2008/13 (4,007 sq km, 1,547 sq miles), and AN-DWN-2009/18 (4,040 sq km, 1,560 sq miles). The first four are located in water depths of 2,875 m (9,432 ft) to 2,980 m (9,777 ft) on the west of Andaman. The remaining two are in water depths of 2,320 m (7,612 ft) to 3,420 m (11,221 ft) on the eastern side of the island.

The six blocks were awarded to ONGC and its partners in the eighth round bidding under new exploration licensing policy in June 2010. ONGC owns 90% PI in AN-DWN-2009/5, 70% participating interest (PI) in AN-DWN-2009/1 and AN-DWN-2009/13, and 60% in AN-DWN-2009/2, AN-DWN-2009/3 and AN-DWN-2009/18. Oil India Ltd., GAIL (India) Ltd., NTPC Ltd., and Gujarat State Petroleum Corp. Ltd. hold minority stake in the six blocks.

The geophysical and 2-D seismic surveys carried out by the operator in the six deepwater blocks have revealed the presence of hydrocarbon plays and the prospects for large hydrocarbon reserves, similar to the ones shown in the neighboring oil and gas fields in Myanmar and Indonesia.

This campaign comes after launching exploration works in four nearby deepwater blocks on the eastern side of Andaman. ONGC, with participating interest of 100%, has already started drilling exploratory wells in two of the four blocks after carrying out the 2-D and 3-D seismic surveys. As part of the production-sharing contract, the company committed to drill five exploratory wells in each of AN-DWN-2002/ 1 and AN-DWN-2002/2, and three in AN-DWN-2003/1.

ONGC is also associated with the exploration and development of AN-DWN-2003/2 with a 45% PI. The Italian major Eni is the operator (with 40% PI) of this block, which is spread over an area of 13,110 sq km (5,062 sq miles) on southeast side of Andaman. The two companies and GAIL (India) Ltd. (15%) are committed to drill three exploratory wells in the Andaman block. Of the three wells, two wells will be drilled up to 2,500 m (8,202 ft), and the third well will be drilled up to 3,000 m (9,843 ft).

ONGC is increasingly targeting the Andaman Nicobar deep waters due to the potential for rich hydrocarbon reserves. Studies carried out by its technical team and other research companies reveal that the Andaman Nicobar basin has potential to produce oil and gas like the adjoining basins in south Myanmar and southwest Indonesia as the geological structures of the three are same.

The Andaman Nicobar basin, spread over an area of 47,000 sq km (18,147 sq miles) – including deep waters –in southeastern part of Bay of Bengal, is part of Island Arc System which extends from Myanmar in the north to Indonesia in the south.

The giant Yadana and Yetagun gas fields in Myanmar are located on the north side of Andaman basin, while Arun, Kuala Langsa, and NSO in North Sumatra basin (Indonesia) are in the south.

The seismic data reprocessed by US-based Spectrum Geo Ltd. indicates that the Andaman Sea basin contains all the elements for successful hydrocarbon exploration as it has identified likely source, reservoir, and seal intervals as well as structural and stratigraphic trapping geometries. It also has identified direct hydrocarbon indicators (DHIs) such as gas clouds, bright and flat spots; and bottom simulating reflectors (BSRs) indicating the presence of gas hydrates.

“The Andaman Sea basin is located between the well explored, mature hydrocarbon provinces of Myanmar to the north and Indonesia to the south. Both areas contain world-class producing fields,” the company said after reprocessing of 10,500 km (6,524 miles) of 2-D seismic data of the Andaman Nicobar basin. “Structures observed on the reprocessed seismic have shown that these successful hydrocarbon exploration trends and analogues could be extrapolated into this frontier area.

India’s upstream regulator, Directorate General of Hydrocarbons (DGH), said its exploration works revealed the presence hydrocarbons in Andaman Nicobar basin. It drilled 14 wells in shallow waters, in which the first well (AN-1-1) encountered gas in middle Miocene limestone and flowed on test at the rate of 180,000 cu m/day.

“Indications of gas from Early Miocene sediments were also recorded in other wells” the regulator said. “Minor gas indications have been observed from the Early Miocene vitric ash beds of well AN-32-1 as well as from Cretaceous sandstone of AN-1-1 well. The data from well AN-63C-1 indicate that good to mature organic matter having Kerogen Type-II & III is present in the pre-Neogene section. In the little Andaman Island, gas seepage is associated with Miocene sediments.”

DGH estimates the prognosticative resources in the Andaman Nicobar basin at about 180 million metric tons.