Hindustan Oil Exploration Company (HOEC) has accelerated its upstream expansion plans across the Northeast and Cambay (Gujarat) basins, securing environmental clearance for drilling 40 development wells and three exploration wells in the Kharsang block(Arunachal Pradesh), even as it progresses with ongoing drilling activity and infrastructure readiness.
The company said it will continue drilling to unlock the full potential of the Kharsang block, subject to partner approvals, signalling a multi-year ramp-up in development activity.
Kharsang: Production Build-Up Underway
In the Kharsang block, HOEC has drilled eight wells so far, with the ninth well currently in progress. Of the completed wells, five are oil producers, while the sixth has been completed as a gas well after overcoming a well control issue, management of the company told a latest earnings call.
The sixth well has been tested and, even at a minimum choke, can sustain production of about 2 million standard cubic feet per day (mmscfd). Management said the results validate substantial gas volumes in the block, which can be commercialised once the Northeast gas grid becomes fully operational.
Two additional wells, the seventh and eighth, will be perforated and hooked up for production alongside the ninth well, as all three are located on the same plinth. Current production from the block stands at approximately 800 barrels of oil per day. Workovers of existing wells were temporarily delayed due to repairs on the workover rig following the earlier well control incident.
The company said geological and geophysical (G&G) reviews of new and legacy well data reaffirm the field’s potential, previously assessed by GCA. HOEC has received responses to expressions of interest for both 2,000 HP and 1,000 HP rigs and plans to finalise contracts shortly to sustain drilling momentum.
Dirok: Capacity Constrained by Demand
At the Dirok gas field in Assam, HOEC has secured approval for a Revised Field Development Plan (FDP), enabling extension of the block. The company plans to drill a well in north Dirok targeting the Barail formation, subject to receipt of a formal extension letter from the Union India.
Dirok gas sales for the current quarter stood at 13 mmscfd, compared to 14 mmscfd in the previous quarter. Sales volume for the company’s share was 0.31 billion cubic feet (bcf), slightly lower than 0.34 bcf in the preceding quarter. Condensate production declined marginally to 5,614 barrels from 5,858 barrels, while realised gas prices softened to $7.32 per mmbtu from $7.80 per mmbtu in the prior quarter.
Although existing wells at Dirok have the capacity to produce up to 45 mmscfd, output remains constrained by limited offtake demand. Management noted that Indradhanush Gas Grid Ltd (IGGL) has commissioned connectivity up to Numaligarh from Guwahati, which is expected to improve evacuation and demand conditions over time.