ONGC Plans ₹4,600 Crore Investment to Drill New Wells and Build Infrastructure in KG Basin

Oil and Natural Gas Corporation (ONGC) plans to invest ₹4,606.35 crore in Andhra Pradesh’s Konaseema district, as per news reports. The proposal involves drilling 10 development wells, setting up two unmanned platforms, laying an offshore pipeline, and building an onshore gas processing facility.

Project Area and Allocation

The work will take place in 2 offshore contract areas on the east coast, one covering 697 sq km and another 148 sq km. These were awarded under the Discovered Small Field-III (DSF-III) round in September 2022 by the Directorate General of Hydrocarbons.

"Total land area required is 26.3 hectares (Odalarevu Terminal) for the proposed installation. Greenbelt will be developed in a total area of 8.7 hectares, i.e., 33% of the total project area. The estimated project cost is ₹4,606.35 crores," EAC stated.

Environmental Clearance Status

ONGC has applied to the Ministry of Environment and Forests for environmental clearance. The Expert Appraisal Committee (EAC) reviewed the proposal on July 24, 2025, but deferred approval. The panel has sought additional information before a decision is made.

Environmental Clearance Requirements

As per the reports, the EAC has advised ONGC to carry out a detailed biodiversity assessment to understand the impact of drilling operations. It also called for an environmental restoration action plan with a specific budget. The capital cost for the Environmental Management Plan (EMP) is set at ₹14 crore, with a recurring annual cost of ₹3 crore. An additional ₹14 crore is proposed under Corporate Environment Responsibility.

The project is expected to create 150 direct jobs and about 310 indirect jobs. Development wells are drilled in proven fields after exploration and appraisal work confirms commercially viable reserves.

Read more: ONGC, BP, and Reliance Sign Joint Deal for Offshore Oil & Gas Exploration in Saurashtra Basin!

ONGC Share Price Performance 

As of 9:47 AM on August 12, 2025, Oil and Natural Gas Corporation (ONGC) share price was trading at ₹234.45, a 0.28% increase.

Conclusion

The KG Basin proposal remains under review. ONGC will move forward once the required environmental assessments and clearances are completed.

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