Reliance Industries Ltd (RIL), which has been seeing a sharp decline in gas production from its D6 block in Krishna-Godavari basin since past three years may finally see some uptick, as it is likely to add around 1.5-2 million standard cubic metres per day (mscmd) of gas production from this month.
The company will start producing from its MA-8 well in its MA field this month, which is expected to produce 1.5-2 mscmd of gas per day, a company spokesperson told dna.
This will help the company to bring back its D6 production to around a level of 14 mscmd by current fiscal end, analysts said.
It must be noted that in the beginning of last month, a company official had informed that the gas output from D6 had declined to 11 mscmd from 14 mscmd in the second quarter.
As per a Motilal Oswal Securities report, RIL’s management had also guided for production increase from 13/14 mscmd to 17 mscmd in D6 in December 2013/March 2014, led by MA-8/MA-6 wells.
RIL’s gas production from D6 has been falling continiously since 2010 after reaching a peak of 60 mscmd.
RIL and partner BP have been citing geological complexities as key reason for the fall in output. Owing to the falling output, the government had rejected RIL’s proportionate cost recovery leading to arbitration proceedings. In December, the Cabinet Commitee on Economic Affairs allowed RIL to charge higher gas price for all its fields against a bank gurantee to be encashed by the government if company was found guilty of wilfully hoarding gas or reducing output at D6.
The current output is made up of about 8.5 mscmd from Dhirubhai-1 and 3 (D1 & D3) gas fields and about 3.3 mscmd from the MA field in the same block. RIL is also repairing a third of the wells shut at its main D1 & D3 fields to boost output by March. RIL had to shut 10 out of the 18 producing wells on D1 & D3 due to sand and water flooding.
D1 & D3, the largest of the 18 gas discoveries in the KG-D6 block, produced 66.35 mscmd, while MA field the only oil discovery in the block, produced 3.07 mscmd.
Besides the fall in output from D1 & D3, gas production from the MA field, which had hit a peak of 6.78 mscmd in January 2012, has dropped. The company has so far made 18 gas and one oil discovery in the KG basin block in Bay of Bengal. While the lone oil find, MA went on stream in September 2008, D1 & D3 were put on production in April 2009. —With inputs from PTI
Stepping on gas
RIL’s management had guided for production increase from 13/14 mscmd to 17 mscmd in D6 in December 2013/March 2014, led by MA-8/MA-6 wells
RIL’s gas production from D6 has been falling continiously since 2010 after reaching a peak of 60 mscmd
RIL and partner BP have been citing geological complexities as key reason for the fall in output.