RIL sees 27% drop in KG-D6 output in June: Govt

RIL sees 27% drop in KG-D6 output in June: Govt

New Delhi: Reliance Industries’ prized KG-D6 gas fields have seen output drop over 27% to around 47 million standard cubic meters per day in June, oil ministry said on Thursday.

“Production from KG-D6 field reached 60 mmscmd (in 2010). However, from December 2010, the production started declining and for the month of June 2011, the average production from KG-D6 field has been around 47 mmscmd," minister of state for petroleum and natural gas R. P. N. Singh told the Lok Sabha.

In written replies to questions on KG-D6 fields, Singh said the government had in 2006 approved an investment of $8.8 billion in two phases in developing Dhirubhai-1 and 3 gas fields in the KG-D6 block (Phase-I: $5.2 billion and Phase-II $3.6 billion).

Dhirubhai-1 and 3 (D1 and D3) fields were estimated to have a life of 13 years with peak natural gas production envisaged at 80 mmscmd.

“The average gas production during April-June 2011 from block KG-DWN-98/3 (KG-D6) block is 48.60 mmscmd which is less than the approved Field Development Plan (FDP) rate of 70.39 mmscmd," he said.

This production is made up of output from D1 and D3 and MA oil field in the block. MA oil field produces about 8 mmscmd of gas while the rest comes from D1 and D3.

“As per the approved Field Development Plan (FDP), the envisaged gas production from D1 and D3 fields was 61.88 mmscmd from 22 wells for the year 2011-12. However, the average gas production during 2011-12 (April-June) is 40.5 mmscmd from 16 producing wells," he said.

MA oil field in the same block produced an average of 15,511 barrels of oil per day in the first quarter of current fiscal as against the production profile of 20,890 bpd as per approved FDP.

“As the contractor (Reliance) has not drilled the required number of wells as per the approved FDP (22 by 2011-12), the Directorate General of Hydrocarbon (DGH) has advised the contractor to expeditiously drill them in D1 and D3 fields in order to enhance the gas production," oil minister S. Jaipal Reddy said in reply to one of the questions.

Reliance has so far drilled only 20 out of the committed 22 wells on D1 and D3 as reservoir has not performed on expected lines. Pressure in the wells has dropped sharply and there is an increased water ingress, resulting in lower per-well gas output.

Of the 20 wells drilled, only 18 are connected to the production facility. Of these 18, only 16 are in production currently. Further in the FDP approved in 2006, Reliance had committed to drill 31 wells by end of current fiscal.

Reddy said due to shortfall in production of about 22 mmscmd, the gas consuming industries have not been able to avail of the required quantity of gas.

“The supply of gas to the core sector (fertilizer, power, LPG extraction plants and city gas distribution) has been maintained at about 45 mmscmd by effecting cuts to non-core sectors to the tune of about 7.9 mmscmd" to their signed quantity, he said.

While Reliance began crude oil production from MA oil field in September 2008, gas output from D1 and D3 fields in KG-D6 block commenced from 1 April 2009.

“There is shortfall in gas production rate due to less number of producing wells vis-a-vis FDP approved number of producing wells," Singh said in reply to another question.

Gas production from D1 and D3 fields was 14.35 billion cubic meter (bcm) in 2009-10 and 17.57 bcm in 2010-11. Oil production from MA field was 0.129 million tonnes in 2008-09, 0.502 million tonnes in 2009-10 and 1.078 million tonnes in 2010-11.

Singh said a technical team from DGH visited the onshore terminal of Reliance at Gadimoga on 26 April to review the field performance of D1 and D3 fields.

“The team had interaction with the technical teams of the operator. The team had discussion on well and field performance from geological, reservoir and production point of view".

“The contractor was advised by DGH to expeditiously drill more development wells in D1 and D3 field as per Field Development Plan (FDP) in order to enhance gas production," he added.