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Updated: November 29, 2012 22:28 IST

Reduction of KG basin reserves by RIL unconvincing: DGH

Sujay Mehdudia
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Reliance Industries KG-D6's control and raiser platform is seen off the Bay of Bengal.
Reliance Industries KG-D6's control and raiser platform is seen off the Bay of Bengal.

The Directorate-General of Hydrocarbons (DGH) has refused to endorse the revised field development plan of Reliance Industries Ltd. (RIL) for Dhirubhai-3 (D1&D3) field in KG-D6 block, calling the drastic reduction in gas reserves as “unprecedented and unconvincing”.

Replying to a letter by RIL’s President and COO (Business) B. Ganguly, seeking approval of the management committee for the revised field development plan, the DGH said the contractor had downgraded the 2P (proved+probable) original gas in place to 4.52 trillion cubic feet (tcf) from 12.59 tcf approved in amended initial development plan and estimated ultimate recovery to 3.10 tcf from 10.3 tcf approved in the amended plan, based on pressure/production data of 18 producers for the last three years (2009-12) and data obtained from drilling of four new wells (A21, A22, B16 & SB1).

“Such a drastic reduction of reserves is unprecedented and unconvincing. It is required to carry out a thorough technical scrutiny… ,” the DGH communication said.

Operating expenditure

The DGH has also asked for phasing of operating expenditure over the projected period along with detailed break-up and economic evaluation, indicating year-wise cash flow, NPV, sensitivity analysis, with respect to total revenue and government take.

It said the development of the area outside main channel areas, as envisaged in the amended initial development plan has not been carried out and no adequate technical justification has been provided in this regard. It is observed that outside the main channels in the D1-D3 field, no significant activity has been undertaken by the operator in order to assess the potential of laminated sand and inter-channel area. “The managing committee had directed the contractor to assess the upside potential of the gas reserves after at least one year of production from this field way back in December 2006.

However, no plan for drilling wells beyond the main channel area has been proposed by the contractor. The operator has drilled 22 wells till 2011. Out of these, 20 wells are in the main channel area and only two wells are drilled in periphery of the main channel. The managing committee approved amended initial development plan has not been implemented. Requisite information may be provided to take a view on the contractor’s proposal,” the letter said.

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