Reliance Industries (RIL) and British Petroleum (BP), its 30% partner in the prolific Krishna-Godavari (KG) basin, on Tuesday assured the oil ministry of a $5 billion investment in the fields to develop gas reserves of 4 trillion cubic feet (tcf).
This investment will come over the next 3-5 years, said an RIL release.
BP chairman Bob Duddley, in India as part of the trade delegation accompanying British Prime Minister David Cameron, and RIL chairman Mukesh Ambani met with petroleum and natural gas minister Veerappa Moily to apprise him of the joint venture’s plan to enhance production from the KG-D6 block, which currently has two producing fields – D1 and D3.
RIL, BP and third partner Niko Resources have chalked out a detailed integrated plan to maintain the output from the D6 block at an optimum level. The plan is awaiting government approval.
The 4 tcf of gas the joint venture plans to develop would cost India as much as $50 billion if the country had to import this gas.
Ambani and Dudley assured to accelerate the pace of exploration and development activities once necessary approvals were granted.
Dudley also promised to bring in all of BP’s deep-water expertise to India to develop the KG basin.
Under the integrated development plan, the joint venture plans to connect the D1 and D3 infrastructure, besides dealing with water ingress, which has eaten into production. This exercise is expected to yield results from 2014.
Simultaneously, RIL plans to develop D26, R-Series and satellite discoveries that are part of the KG D6 block and are currently unoperational. These will add to incremental production from 2017.
The D1 and D3 fields started production from the first quarter of 2009-10, clocking 19 million metric standard cubic metre per day (mmscmd) against a target of 20 mmscmd. Production increased consistently to 60 mmscmd in the final quarter of that fiscal, but has slid ever since to around 20 mmscmd now.