OREANDA-NEWS. February 22, 2011. State-owned Oil and Natural Gas Corp (ONGC) has over 1.7 bn tonnes of oil reserves in its domestic and foreign fields, according to independent audits. ONGC's 64 domestic fields have a total reserve of 1.06 bn tonnes of oil and oil equivalent natural gas while its 12 properties in countries like Russia and Sudan hold almost 640 mn tonnes of reserves.

The company, in preparation for its share sale next month, had engaged Gaffney Cline and Associates (GCA) and DeGolyer & MacNaughton (D&M) to audit its 64 domestic fields and assets in Russia, Sudan, Syria, Brazil, Colombia, Venezuela, Vietnam, Myanmar and Egypt, official sources said.

While GCA prepared audited estimates for ONGC's giant Mumbai High field, D&M carried audit of 63 other domestic fields and the overseas assets. The government plans to sell 5 per cent of its shareholding in ONGC in the follow-on public offer (FPO) next month to raise Rs 12,000-13,000 crore.

According to the audit estimates, the 64 fields have proved or 1P reserves of 612.55 bn tonnes of oil and oil-equivalent gas. Furthermore, 888.04 mn tonnes were estimated as probable or 2P reserves which have at least 50 per cent chance of being produced. Another 1.06 bn tonnes of reserves were classified as possible or 3P which have a 10 per cent chance of being recovered.

D&M estimated that the firm's overseas assets hold 1P reserve of 119.977 mn tonnes, 2P reserve of 288.299 mn tonnes and 3P reserve of 639.706 mn tonnes of oil and oil equivalent gas. The audited estimates are higher than ONGC's self assessment that put domestic and overseas reserves at 1.655 bn tonnes (3P reserves). 1P reserves were estimated at 951.77 milion tonnes and 2P reserves were put at 1.4 bn.

Sources said ONGC's self-assessment put 1P, 2P and 3P reserves in domestic fields at 770.86 mn tonnes, 1 bn tonnes and 1.21 bn tonnes respectively. For overseas assets, the figures were 180.91 mn tonnes, 404.16 mn tonnes and 445.61 mn tonnes oil and oil equivalent gas.

Sources said oil reserves were primarily a measure of geological risk - of the probability of oil existing and being producible under current economic conditions using current technology. The three categories of reserves generally used are proven (reasonably certain to be producible), probable (50 per cent chance of these being produced) and possible reserves (having 10 per cent certainty of being produced). The reserve audit will help ONGC get a good response to the planned share sale likely to open on March 15.