Reliance Industries (RIL) plans to do maintenance work on some wells in its KG-D6 block which may help increase natural gas output from the flagging block, upstream regulator the Directorate General of Hydrocarbons (DGH) said today.
"They [Reliance] are supposed to undertake some workover job in the sick wells [in KG-D6 block]... Workover should improve production," said SK Srivastava, Director General, DGH here.
RIL, he said, had to shutdown five wells in the eastern offshore KG-D6 block due to drop in pressure and water ingress.
"Workover is meant to revive sick wells and if that happens production may go up," he said.
Latest figures show gas production from the Dhirubhai-1 and 3 fields in the Krishna-Godavari Basin in the Bay of Bengal falling to a fresh low of 32.94 million cubic metres per day mmscmd this month, down from the 54 mmscmd peak hit in March 2010 before well pressure dropped and water incursion began.
According to the original RIL's development plan approved by the authorities, output should have reached 61.88 mmscmd this month. Associated gas production from the MA oil field in the same licence area was 6.86 mmscmd, for a combined total of 39.8 mmscmd, versus the expected 70.39 mmscmd.
RIL has so far drilled 22 wells on D1&D3 but has not put four wells on production due to insignificant volumes. Of the 18 wells connected to production system, four had been shut due high water cut. One well on MA oilfield has also been shutdown.
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Srivastava said RIL is planning workover on these shut wells.
Oil Minister S Jaipal Reddy had last week told Parliament that RIL has to drill all 31 wells outlined in the original development plan by March 2012 and had blamed the production decline on the failure to do so.
His ministry is readying a note for disallowing $1.235 billion of the original costs on the grounds the drop in production has left some of the 80 mmscmd production facilities unused.
RIL opposes any move to restrict cost recovery, now 100% in proportion to production and has slapped an arbitration notice on the ministry.
Srivastava refused to comment on the arbitration.
Of the 18 wells drilled, completed and put on production in the D1 and D3 fields, four wells -- A2, B1, B2 and B13 -- had to be shut or closed due to high water cut/sanding issues.
While RIL holds 60% interest in KG-D6, UK's BP Plc holds 30% and Niko Resources of Canada the remaining 10%.