The Director General of Hydrocarbons (DGH), S. K. Srivastava on Wednesday was silent on the action Government or DGH could take if Reliance Industries Limited (RIL) does not raise production from its prolific KG-D6 field to 67-68 million standard cubic metres of gas a day (mscmd) by April 2011.
The KG-D6 block has recorded a 15 per cent fall in production and the output has been hovering around 51-52 mscmd. “Reliance needs to drill two more wells by April but did not elaborate if the company can actually complete the task in less than a month's time.”
He also did not spell out what action can the DGH and the Government take if RIL fails to meet its commitment. “As per the approved field development plan (FDP), gas production should rise to 67 mscmd in April,” he said.
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Reliance is currently producing 50-51 mscmd of gas from KG-DWN-98/3 block, also known as KG-D6, off the Andhra Pradesh coast. The output is lower than the 60 mscmd average production in the April-June quarter of 2010. The output is made up of gas output from the Dhirubhai-1 and 3 fields, known as D1 and D3, and the D-26, or MA oilfield.
D1 and D3 have seen output fall from 53-54 mscmd in mid-2010 to 42-43 mscmd at present. The MA oilfield in the same block is producing about 8 mscmd of associated gas. Together, the current output from KG-D6 stands at 50-51 mscmd.
Mr. Srivastava said that 18 wells have been drilled so far and completed out of 22 development or production wells approved in Phase-I of the FDP for the D1 and D3 fields. Gas is being produced from 16 wells and two more wells are complete, but not put on production. Another two wells are yet to be connected to production system.
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“Once all 22 wells come on stream sometime in April, gas output (from D1 and D3) will again touch 60 mscmd,” he said. Total investment in KG-D6 till date is $7.8 billion. As per the approved FDP, the D-1 and D-3 gas fields, which began gas production in April, 2009, have a field life of 13 years, with a plateau period of six years. Peak output of 80 mscmd is projected sometime in 2012-13. Together with gas output from the MA field in the same block, KG-D6 production is pegged to touch 88.5 mscmd in 2012-13.
According to the production profile prepared by the DGH, production from KG-D6 will be 86-87 mscmd between 2013 and 2016 before dipping to 81.24 mscmd in 2017-18. Subsequently, the output will gradually taper down to less than 40 mscmd by 2020-21.
RIL has so far made 19 oil and gas finds in the Krishna-Godavari Basin Block KG-DWN-98/3, or KG-D6, which it won in consortia with Niko Resources of Canada under the first round of the New Exploration Licensing Policy (NELP) in 2000.
Officials in the Petroleum Ministry said the company had been forced to restrict production from the MA oil field to about 17,000 barrels a day due to high water and gas output. The field was yielding more water than oil and that even 8 mscmd of gas in comparison to oil output was considered quite high. The MA field had five oil producing wells and one gas producer.
Reliance will have to drill two more wells to meet its commitment of 22 production wells by April, 2011, which would help it produce up to 60 mscmd gas from D1 and D3 fields.