HOEC Dirok PSC runs to 2035, but evacuation limits gas

HOEC’s Dirok production sharing contract, or PSC, now runs until 2035 after approval of a revised field development plan, while average gas output increased to 22.1 MMscf per day in Q2FY27 from 15.3 MMscf per day in Q1FY27 despite constrained evacuation infrastructure.

What did HOEC’s Dirok PSC extension secure?

HOEC secured Dirok for 10 years until 2035 after the Ministry of Petroleum and Natural Gas approved the revised field development plan, or FDP. The approval extends the PSC term for the asset in Margherita, in the Assam-Arakan basin and the Schuppen Belt of Upper Assam.

Dirok produced 4,684 barrels of oil equivalent per day, or BOEPD, in Q2FY27 and had HOEC 2P reserves of 13.31 million barrels of oil equivalent, or MMBOE, as of September 30, 2026. HOEC holds a 27% participating interest, while Oil India Limited holds 44% and Indian Oil Corporation holds 29%.

The extension applies to a development programme that remains at the preparation stage. HOEC’s drilling overview lists three FDP wells, with none drilled and none in pipeline, and gives FY27-28 as the expected timeline.

How much did Dirok production increase in Q2FY27?

Dirok’s average gas production rose by 6.8 MMscf per day, or about 44%, to 22.1 MMscf per day in Q2FY27 from 15.3 MMscf per day in Q1FY27. Average condensate production increased by 107 barrels per day to 384 barrels per day from 277 barrels per day over the same period.

The increase in both products occurred while HOEC identified the availability of gas-evacuation infrastructure as the current constraint on production. This means the Q2FY27 production improvement did not remove the field’s stated transport limitation.

HOEC also took over operation and maintenance of HMGPP from EXPRO North Sea Limited of the United Kingdom. The update does not state a cost, production or throughput effect from this handover, but identifies it as an operational development alongside the evacuation work.

Why is HOEC’s Dirok gas evacuation constrained?

HOEC says Dirok production is constrained by the availability of gas-evacuation infrastructure because key links are incomplete or awaiting commissioning. The company says it is discussing evacuation with industry stakeholders across upstream, midstream and downstream operations.

The Duliajan-Numaligarh Pipeline, or DNPL, is a 16-inch, 192-kilometre line with current capacity of 1.0 million standard cubic metres per day, or MMSCMD. HOEC says capacity is to be enhanced to 2.5 MMSCMD, but a 50-kilometre pipeline replacement was pending commissioning by December 2026.

DNPL was declared a common carrier in August 2026. That status coincides with the pending replacement work rather than confirming that the planned increase to 2.5 MMSCMD has been commissioned.

The Margherita Gas Pipeline, identified as the MGPL-Dirok joint-venture line, is an 18-inch pipeline of about 32 kilometres from Kusijan to Duliajan with capacity of about 2-3 MMSCMD. Its 15-kilometre forest section had been commissioned, but its remaining 17-kilometre non-forest section had yet to be laid.

Which links could expand HOEC’s Dirok evacuation options?

The disclosed routes that could improve Dirok’s evacuation options are the unfinished Margherita Gas Pipeline section, the DNPL replacement, an IGGL hook-up and shared facilities at Madhuban in Duliajan. HOEC says its discussions with Oil India Limited on the IGGL hook-up and the upcoming Madhuban facilities are in progress.

The Indradhanush Gas Grid Limited, or IGGL, main pipeline between Guwahati and Numaligarh is a commissioned 24-inch, 396-kilometre line with capacity of about 4.75 MMSCMD. However, the separate Duliajan feeder line, a 24-inch, 175-kilometre connection from Numaligarh to Duliajan with capacity of about 3.5 MMSCMD, is targeted for completion by FY2028-29.

The regional network also includes the commissioned Urja Ganga GAIL feeder pipeline, a 24-inch, 790-kilometre line from Barauni to Guwahati with capacity of about 14 MMSCMD. HOEC’s identification of Dirok-specific constraints indicates that commissioned trunk lines do not by themselves complete the field-level route between Dirok, Kusijan, Duliajan and potential downstream users.

HOEC’s pipeline map records an interconnection at NRL by December or January, without specifying a year. The presentation distinguishes current routes from future routes, so it does not establish the date on which all additional Dirok evacuation capacity could become available.

What drilling work is planned at HOEC’s Dirok block?

HOEC plans to advance the North Dirok-1 exploration well and is acquiring land for three development wells. Civil work, including land filling and an access route to the North Dirok-1 drill site, had been completed, and HOEC said the well was likely to be spudded in Q4FY27.

For the three development wells, land acquisition was in progress at the time of the update. The FY27-28 drilling timeline therefore depends on moving from land and site preparation to drilling, because the FDP overview still records zero wells drilled and zero in pipeline.

The PSC term to 2035 extends beyond the FY2028-29 target for the Duliajan feeder line. HOEC does not disclose a Dirok production forecast, development expenditure, gas-sales agreement or date for full evacuation, leaving the scale and timing of any future output increase unspecified.

Conclusion

HOEC’s Dirok update combines a longer operating term with higher reported output: gas production increased by 6.8 MMscf per day between Q1FY27 and Q2FY27, and the revised FDP secured the block until 2035. Yet the incomplete Margherita Gas Pipeline, pending DNPL replacement and other connection work mean evacuation remains the central operational constraint.

The next disclosed milestones are the expected Q4FY27 spud of North Dirok-1, land acquisition for three development wells and the planned December 2026 commissioning of the DNPL replacement. Progress on the IGGL hook-up, Madhuban facility-sharing discussions and the Duliajan feeder line targeted for FY2028-29 will determine whether the regional transport network becomes more complete.