The state-owned Oil and Natural Gas Corporation is launching a multi-billion dollar deep-sea oil and gas project to explore Rs 644,000 crore (Rs 6,440 billion) worth of hydrocarbons lying in both the east and west coasts of the country.

The project, code-named "Sagar Samriddhi", involved an investment of $2.6 million per day to search for one-third of the estimated 11 billion tonnes of oil and oil equivalent gas reserves lying unexplored in the deep waters, ONGC chairman and managing director Subir Raha said at a press conference in New Delhi on Sunday.

"This is the biggest deep-water exploration attempt by a single operator, anywhere," he said.

He said ONGC was targeting to add four billion tonnes of reserves from the deep-sea exploration campaign.

"If we can produce one-fourth of these reserves, we will have one billion tonnes of oil and oil equivalent gas over 25-30 years. At $20 a barrel, the revenue from this kind of production will be Rs 644,000 crore," he said.

The corporation plans to drill 47 exploratory wells in its blocks spread across the Arabian Sea and the Bay of Bengal.

It has hired Discoverer Seven Seas rig from Transocean Inc of the United States and Belford Dolphin from Dolphin Drilling of the United Kingdom besides its in-house Sagar Vijay rig for the deep-water campaign.

ONGC director (exploration) Y B Sinha said the corporation's current crude production of 26 million tonnes could go up to 49 million tonnes by 2011-12 and 62 million tonnes by 2016-17 if the project was successful.

Similarly, gas production could almost double from 65 million standard cubic metre per day during the period, he added.

ONGC's Sagar Vijay rig, capable of drilling up to 900 metre below the sea bed, will dig the first well in the Krishna-Godavari basin, off the Andhra coast, in October.

Belford Dolphin would drill up to 3,000 metre in the Bay of Bengal from November, while Discoverer Seven Seas would drill up to 1,500 metre in the Arabian Sea in February next year, Raha said.

The corporation will pay Dolphin $361,763 per day for Belford Dolphin, while Transocean will receive $336,906 per day for Discoverer Seven Seas.

The fees will be inclusive of integrated management services that Dolphin and Transocean will provide in consortia with Tidewater and Schlumberger, respectively.

Transocean had initially offered $351,6070 per day and Dolphin had put in a $362,877 bid. The post-bid negotiations saw Transocean lowering its rates four times, while Dolphin lowered its rates just once.

Raha said besides the $0.75 million per day cost of the ultra-modern deepsea rigs, ONGC would have to spend about $0.2 million per day on its Sagar Ratna rig, $0.3 million a day on associated services and $1.3 million every day on the 26 jack-up rigs.