Reliance Industries’ gas output from its flagship eastern offshore Krishna Godavari (KG) D6 gas fields may see a further decline till new wells are tied in for production.
Canada’s Niko Resources, which is RIL’s 10 per cent partner in the KG-D6 block, said in its October-December quarter report: “D6 gas production in December averaged approximately 137 million cubic feet per day. Declines are expected to continue till workovers are completed and/or additional wells are tied in.”
Niko added that its share of gas production in the October-December quarter from the D6 block averaged 143 million cubic feet per day, compared to 195 million cubic feet per day in the quarter the previous year.
The KG-D6 output in October-December, according to Niko's statement, should be 40.49 million standard cubic meters per day (mscmd), compared to 55.21 mscmd in the period a year earlier.
Production of oil from the MA discovery began in September 2008 and production of gas from the Dhirubhai-1 and -3 (D1&D3) discoveries in April 2009.
RIL has so far drilled 22 wells on D1 and D3 — two of the 18 gas finds in the KG-D6 block that have been brought to production. Of the 18 put on production, five have ceased due to the entry of sand or water.
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“The company is to do workovers or maintenance of these well which may raise the output,” Niko said.
“Oil production from the D6 Block decreased as five wells were producing in the period, compared to six for most of the previous year's periods, and a decrease in production from the remaining wells,” Niko said.
RIL had said in an investor presentation during its third quarter results that it would begin engineering surveys soon on the four satellite fields — D-2, D-6, D-19 and D-22 — for which it had received government approval.
“We have a four-month weather window and we plan to take advantage of that. We are beginning work on the entire geophysical, geotechnical and geohazard studies. But, since the plan was made in 2009, (the approval came only this month), we have to look at the numbers again and review if required,” RIL had said last month.
The approved capital expenditure, of $1.529 billion (Rs 7,700 crore), for development of the field, could be revised upwards or downwards by 10 per cent, depending on the actual costs.
Niko, in its statement, added that further development was expected at D6 when the “R complex” and three additional satellite discoveries were added. The four fields are said to be able to produce 10 mscmd of gas by 2016.
BP and Niko Resources are also partners in the fields. Niko holds 10 per cent and BP farmed in last year for 30 per cent in RIL’s 23 blocks. RIL holds 60 per cent stake.