Moody’s on Wednesday said RIL’s partnership with BP would bring onboard the required technical skills to overcome the complications (in D6 block), even as the rating agency expected the production to return to the target level in the medium term. Earlier this year, on February 23, Moody’s had changed the outlook on the Mukesh Ambani-headed conglomerate to positive from stable after the deal with the London-headquartered oil and gas company was announced.
“The block,” according to a Moody’s report on RIL, “was expected to produce at a minimum rate of 60 mscmd this year, before reaching a peak production rate of 80 mscmd. This has been attributed to reservoir complexities.”
There are possible signs of disruption at its largest oil & gas producing block, KG-D6, where production has been declining. The block is now producing below 45 million standard cubic meters a day (mscmd), which is nearly 75 per cent of its target daily production rate of 60 mscmd. The firm’s proved reserves have also not seen meaningful organic growth in the last three years -- and are now at their lowest since March 2006.
The lower production volumes could have been compensated by higher oil and gas prices but most of the gas produced in KG-D6 is sold under long-term gas sales agreements that have a price cap of $4.2 a unit.