Shares in Reliance Industries (RIL) soared 4.22% to Rs 845.35 on Thursday in Mumbai as news filtered in that the management committee (MC) of the D6 gas block in the Krishna Godavari (KG) basin approved a $3.18 billion investment to develop the R-Series field, a decision that could unlock up to 1.19 trillion cubic feet (tcf) of gas reserves and bring them to production in the next four years.
Analysts said the investment could prove a shot in the arm for RIL and its partners in the KG D6 field (BP and Niko Resources).
“The R-Series fields should start producing by 2017-18 and at peak should be able to produce up to 13-14 million units of gas,” said a source close to the development.
Any such output would match the current level of extraction from the only producing fields of D1 and D3 in the KG D6, which is close to 13 million metric standard cubic metres per day (mmscmd).
The R-Series fields are located south-west of the D1 and D3 fields with RIL-estimated recoverable reserves of 1.413 tcf.
Sources said the MC has, however, trimmed the estimate to 1.19 tcf before giving the approval.
RIL submitted the R-Series field development plan (FDP) in January 2013 as an addition to the September 2012 integrated development plan that envisaged arresting production from D1 and D3, development of D26, R-Series and satellite discoveries. Once approved, the larger plan is expected to enhance the overall reserve base of KG D6 by 4 tcf.
They are expected to add to incremental production by 2017-18, say sources.
The D34 gas discovery was notified in May 2007 and declared commercially viable by the MC in November 2011.
Now, the FDP has finally received the go-ahead to start production.
RIL has so far made 19 gas discoveries and one oil find in the KG-D6 block. Of these, D1 and D3 gas fields were brought to production in April 2009 while the MA oilfield began pumping oil in September 2008. With input from newswires