Oil Min, DGH order RIL to drill 2 wells in KG-D6 by June

Oil Min, DGH order RIL to drill 2 wells in KG-D6 by June

New Delhi: Ignoring Reliance Industries’ plea for seeking advice of global experts on reservoir issues faced at its KG-D6 fields, oil ministry and its technical arm DGH have ordered the Mukesh Ambani firm to drill two wells by next month and another nine by fiscal end to raise gas output.

Dhirubhai-1 and 3 fields in the eastern offshore KG-D6 block are producing 41-42 million standard cubic meters per day of gas as opposed to 61.88 mmscmd planned due to fall in reservoir pressure and water ingress in wells.

At a meeting of the Management Committee (MC) of KG-D6 block on 2 May, Reliance pleaded for putting in place a technical committee comprising of global experts for advice on the best way forward on the issues facing the fields, a source privy to the minutes of the meeting said.

DGH and oil ministry choose to ignore Reliance call and ‘advised´ Reliance to drill two wells and complete a similar number of wells drilled previously by the first quarter of 2011-12 fiscal (June end).

Also, they wanted another nine wells to go on stream before the end of the fiscal in March 2012.

DGH representative, according to the minutes, remarked that any additional well will take three years from the date of approval for well location by MC and, therefore, the additional production from these wells is unlikely to commence before 2014.

Weather window for drilling in Bay of Bengal almost at the end and yet DGH asked Reliance to drill 11 wells by March.

The source said Reliance suggested that instead of additional wells, those wells showing increasing trend in water production be considered for work over jobs. The firm said it has already planned for work over jobs in six wells.

At the meeting, Canada’s Niko Resources, which owns 10% interest in Reliance-operated KG-D6 block, rejected DGH suggestions to drill well outside the main reservoir channel as economically unjustified.

Reliance-Niko, the source said, explained that they have complied with field development plan (FDP) in all respects except for the drilling of a few wells.

They also provided the technical reasons related to the reservoir complexities with reservoir behaviour being different from what was envisaged/considered at the time of 2006 FDP leading to delayed drilling of wells compared to the FDP.

DGH representative, according to the minutes, remarked that the Reliance has drilled wells in the main channel area where 40% of the reserves are present and additional wells will have to be drilled in the remaining 60% of the outside channel area.

Reliance explained that all the existing 18 production wells are in the main channel area as envisaged in the FDP.