In its first well in the 16 months after it got approval to invest $7.2 billion, BP Plc of the UK, along with its partner, Reliance Industries, has begun drilling on a satellite discovery surrounding the now flagging gas fields in the KG-D6 block.
BP had in July last year won government nod for investing $7.2 billion in taking 30 per cent interest in 21 oil and gas blocks of RIL including the gas discovery areas of KG-D6 and NEC-25 in Mahanadi basin. But it could not drill a single well till now because the petroleum ministry refused to give approval.
Sources privy to the development said a well on the D-19 field, also called Satellite-1 field, was spudded on Sunday.
The is part of the $1.529 billion plan to develop four satellite gas fields around the now producing Dhirubhai-1 and 3 or D1&D3 fields in the Krishna Godavari basin KG-D6 block.
The block oversight panel, called the Managing Committee, headed by the Directorate General of Hydrocarbons, had on January 3 this year approved an optimised field development plan for the four satellite gas discoveries (D-2, D-6, D-19 and D-22) in KG-DWN-98/3 (or KG-D6) block.
The approved plan envisaged drilling of 8 development gas wells. The development well KG-D6-G2 on the D-19 discovery is part of that plan, sources said.
This will be the first development well to be drilled since BP came into RIL's acreage. RIL-BP had lost the last four- month weather window available for drilling in Bay of Bengal as approvals did not come in time. They started spudding the well when the weather window opened this month.
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The approved development plan for the four satellite finds envisages a peak production of 10.3 million standard cubic metres per day. Output is projected to begin in mid-2016.
The four fields will help augment output from the main D1&D3 fields which have seen production drop from 55 mscmd peak achieved in August 2010 to under 19 mscmd currently.
Water and sand ingress has led to closure of a third of the 18 producers on D1&D3. Together with about 5 mmscmd output from MA oil and gas field in the same Krishna Godavari basin block, the current output is hovering around 23 mmscmd. RIL has till date made 18 gas and one oil find in the KG-D6 block in the Bay of Bengal. Of these, D1&D3, the largest of the 18 gas finds, were put on production in April 2009 while MA oil field came into production in September 2008. The four satellite fields and other discoveries are key to BP's plan for reversing the flagging output. The four finds have recoverable reserves of 617 billion cubic meters out of an in-place reserves of 1.343 trillion cubic feet.