Reliance to shut its only oil field in KG-D6 in September
The D-26 or MA field in KG-D6 had produced 39,976 tonnes of crude oil in the first month, peaked to 108,418 tonnes in May 2010, and slumped to 1960 tonnes in April-June 2018
New Delhi: Exactly a decade after it started production, the MA oil and gas field in the Krishna-Godavari basin block (KG-D6) will seize to produce from September, said Reliance Industries Ltd, which has battled quicker than anticipated decline in output at a block that once was its pride. Reliance has till date made 19 oil and gas discoveries in the Krishna-Godavari basin. Of these, D26 or MA—the only oil discovery in the block—was the first field to began production in September 2008. Dhirubhai-1 and Dhirubhai-3 (D1 and D3) fields went onstream in April 2009.
“MA field cessation expected by September 2018,” Reliance said in an investor presentation post announcing June quarter earnings. The field had in the first month produced 39,976 tonnes of crude oil and peaked to 108,418 tonnes in May 2010, according to data available from upstream regulator, the Directorate General of Hydrocarbons (DGH).
Output has been declining since then. It produced 0.14 million barrels (1960 tonnes) in the April-June quarter, Reliance said in the presentation. MA also started producing gas from April 2009, just when D1 and D6 went live. It peaked to 8.4 million standard cubic metre per day in August 2010 before sand and water ingress forced a shutdowns.
D1 and D3 fields too had a peak that year in March when it touched an output of 61.4 mmscmd. Output thereafter has only declined.
Reliance said KG-D6 output in April-June averaged at 4.7 mmscmd, which includes production from both D1 and D3 and MA fields.
In April, the Mukesh Ambani-controlled firm stated that “adhering to Site Restoration Guidelines issued by Government of India, RIL submitted Bank Guarantee for Decommissioning activity for existing producing fields”. While the company had not provided any timelines for decommissioning and stopping of production at the fields then, it has now said MA field would shut in September. The government’s site restoration guidelines provide for a one-year notice for decommissioning of facilities.
The shutdown coincides with the expiry of the current lease of a floating production storage and offloading (FPSO) unit, which processes output from the field.
Reliance is the operator of KG-D6 block with 60% interest, while BP Plc of the UK holds 30% stake. Niko Resources Ltd of Canada has the remaining 10%.
Reliance had in the field development plan for D1 and D3 proposed a capital expenditure of $8.836 billion. For developing Dhirubhai-26 or MA oilfield, it had in 2006 proposed to invest $2.234 billion, which was scaled down to $1.96 billion in 2012. The fields were in the investment plans supposed to last a minimum 15 years but have extinguished in exactly a decade’s time.
Reliance in the presentation said it is now developing three sets of discoveries: R-Cluster, Satellite Cluster and MJ fields in the KG-D6 block at a cost of ₹ 40,000 crore. These fields together would bring 30-35 mmscmd of peak output. Initial gas will start flowing from 2020.
With inputs from PTI