Home >Industry >Energy >Covid-19 delays production from RIL's R-cluster in KG Basin

The covid-19 pandemic has delayed production from Reliance Industries' (RIL) R-series block in the KG basin. RIL, which was to start production from R-series last month, has pushed it to the second half of this fiscal, the company said in a call post its first quarter results.

Reliance and its partner BP Plc of the UK had in June 2017 announced an investment of 40,000 crore in the three sets of discoveries to reverse the flagging production in KG-D6 block. These include-- R-Cluster, Satellite Cluster and MJ field. R-Cluster is the first to come on stream.

Reliance is the operator of the block with 66.6% interest while BP holds the remaining stake.

"Prior to covid-19 outbreak, the project was on track for commissioning by mid-2020. Drilling and sub-sea installation work for all wells have been completed," said RIL, adding that offshore works on platform and pre-commissioning requiring mobilization of critical resources of original equipment manufacturer contractors from global locations are pending due to covid-19 restrictions

"Despite covid-19 pandemic related lockdown and constraints, all efforts are underway to commission the project in H2 FY21," RIL said.

Reliance has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 were brought into production in April 2009 and MA, the only oilfield in the block, in September 2008.

Besides MJ-1, four deepsea satellite gas discoveries -- D-2, 6, 19 and 22 -- are planned to be developed together with D29 and D30 finds on the block. The third set is the D-34 or R-Series find.

Besides MJ-1, the company plans to develop four deepsea satellite gas discoveries -- D-2, 6, 19 and 22 -- together with D29 and D30 finds on the block. The third set is the D-34 or R-Series find.

These finds are expected to bring a total 30-35 million cubic metres (1 billion cubic feet) of gas a day on stream.

RIL's exploration and production (E&P) segment posted a weak performance in the first quarter of this fiscal as domestic gas volumes continued to decline.

Segment Revenues for the quarter declined by 45.2% year on year to 506 crore primarily due to lower production in domestic business post closure of Panna Mukta and D1D3 fields and lower prices. Segment earnings before interest tax depreciation and amortisation for the quarter turned negative at 32 crore with lower volumes and weak realizations, the company said.

"The KGD6 R-Cluster which was expected to start up by mid-2020 has been deferred to H2 FY21 due to slower commissioning progress as a result of covid-19. The KG D6 project (three phases) will develop more than 3Tcf of gas with gross production of 28 million metric standard cubic metres per day and should reach peak production by FY24," said Bernstein Research in a report dated 31 July.

The satellite cluster and the MJ development are also progressing for development with first production expected in 2021/22, RIL said.

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