ONGC Videsh Ltd (OVL), the overseas investment arm of Oil and Natural Gas Corporation (ONGC), said it would start production from the deep-sea block in Brazil from 2026.

The exploration firm, which had in 2019 reported the gas discovery, said it was commercially viable and has now entered the development stage that will bring it to production.

OVL had registered a major gas discovery in 2019 in its deep offshore block BM-SEAL-4, Brazil, located in the Sergipe Alagoas Basin.

However, the firm neither gave investment nor production details.

The company said “after detailed evaluation it now enters into the development stage with the submission of the declaration of commerciality (DoC) for the block BM-SEAL-4”.

The field also holds oil reserves. The block development module of Petrobras envisages the installation of a shared FPSO and a gas pipeline.

"The name suggested to the Brazilian regulator for the field is Budiao," it said. "The development module is presently in the contract planning phase and is expected to start production after 2026. The Consortium plans to continue all operational activities for submission of the development plan to the regulator and meeting the target for the first oil."

The well "encountered gas-bearing sand of total thickness of 39 metres at the depth of 5,227 metres and oil-bearing sand of total thickness of 24 metres at deeper depths. Drill Stem Test (DST) was performed in the gas carrier interval 5,252 metres to 5,291 metres, and the result showed good production from the reservoir," the firm had earlier said.

The Block is located in the Sergipe Alagoas Offshore Basin in Northern Brazil and has an area of 320 Sq. Km. with water depths ranging from 1500 to 2700 metres.

Exploratory block BM-Seal-4 was originally awarded to Petrobras in August 2000. ONGC Videsh farmed-in to the block in 2007 with 25% PI as part of a swap agreement between ONGC Videsh and Petrobras (75% PI). Petrobras is the operator of the project with 75% PI.