After a long wait for government approval, Reliance Industries (RIL) is to begin work on development of four satellite fields—D-2, D-6, D-19 and D-22—in India’s largest gas field, block D6 in the Krishna-Godavari basin, or KG-D6 .
In an investor presentation on Friday, RIL said it would start engineering surveys soon. The approved capital expenditure of $1.529 billion (Rs 7,700 crore) could be revised upwards or downwards by 10 per cent, depending on the actual costs.
“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,” said a source. “In this period of waiting (for the approval), we now have data of over two years production of D1 and D3. We have to revalidate the assumptions we had made, based on the data we had collected. During this process, if at all there is any change required, we will do so,” the source added.
The four fields are said to be able to produce 10 million cubic metres of gas per day by 2016. RIL posted its third-quarter numbers last week and said its oil and gas exploration business posted a 32 per cent decline in revenue, on account of lower production at D6. RIL is producing 40 million standard cubic metres per day (mscmd), 33 per cent lower than the 60 mscmd it was producing a year earlier.
Two months ago, RIL had told the regulatory authorities that it wishes to take advantage of the weather window. “You may or may not get the resources in place to complete the work. There are certain items for which there are only a handful of vendors worldwide. We have to speak to them and find their costs and product availability, and then you never know how long it will take to get the equipment. All this has to be factored in,” the source added.
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 stake in RIL’s 23 blocks. RIL holds 60 per cent stake.
