“The loss to wells runs into about $175 million,” a source claimed, though he added that the loss is recoverable through insurance claim.
NEW DELHI: Reliance Industries Ltd’s (RIL) two wells in D6 block in the Krishna Godvari (KG) basin have hit a technical snag. A production block well B4 and an exploration well D11 have encountered problems, sources said.
“The loss to wells runs into about $175 million,” a source claimed, though he added that the loss is recoverable through insurance claim.
A senior RIL executive, however, said the snags have been rectified and that the problems would not delay production of natural gas from the D6 block. Stating that there was an equipment failure on the rig operating in the area, he said, “It was a normal problem. Such things are normally budgeted at the time of drilling and while planning production.”
When contacted, a RIL spokesperson said, “There was absolutely no technical snag. Production will start in the second half of this year.”
Sources said the development well B4 was required to produce about 30% of the 80 million standard cubic metre a day (mmscmd) natural gas reserves that D6 is estimated to be bearing.
The RIL executive added that the snags did not result in abandonment of the well and claimed production from the block would not be delayed. DNA Money had reported in November that production from D6 would start from the third quarter of 2008 at the rate of 2.8 billion cubic feet a day unlike the previously scheduled in the first half of the year.
Sources said 17 of the planned 18 development wells for natural gas in the block had been drilled and their completion was expected but with one of them suffering damages it might require operational adjustments.
RIL, like other exploration companies in the country, is facing shortages of rigs, though in order to meet the production schedule of D6 it has pressed into service three rigs for the KG block namely Discoverer Seven Seas, Discover 534 and Deepwater Frontiers, sources said.
jyoti_m@dnaindia.net
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