ONGC's Deepwater Oil Production in KG Basin Hits Roadblock

Oil production from ONGC's flagship KG-DWN-98/2 block has dropped to around 20,000 barrels per day (bpd), falling short of its peak target of 45,000 bpd. The complex geology of the reservoir is attributed as the primary cause for this decline, with poorly connected pockets limiting hydrocarbon flow and drainage.

ONGC had expected a significant boost to its overall oil production from the KG-DWN-98/2 block, but the sharp fall in output has complicated this expectation. The company has brought in energy major BP to diagnose the root causes of the production constraints and identify well interventions that could help improve output.

The decline in production is reminiscent of Reliance's experience in the KG basin, where output from the D1-D3 fields declined sharply after an initial ramp-up due to water and sand ingress. The newer fields lifted KG-D6 gas production to a peak of 30.6 mmscmd in 2025, but output has since declined.