RIL to invest $5 bn in reversing KG-D6 output fall
With gas output from its flagship KG-D6 fields dipping to an all-time low, Reliance Industries chairman Mukesh Ambani has said the company will invest over $5 billion in "a series of projects" to reverse the trend.business Updated: May 09, 2013 15:59 IST
With gas output from its flagship KG-D6 fields dipping to an all-time low, Reliance Industries chairman Mukesh Ambani has said the company will invest over $5 billion in "a series of projects" to reverse the trend.
RIL and its British partner BP Plc have submitted to the government plans to bring to production satellite fields in the eastern offshore KG basin block to raise output that has plummeted to less than 16 million standard cubic meters per day from about 64 mmscmd achieved three years ago.
"We are planning to invest in a series of projects to develop around 4 trillion cubic feet of discovered natural gas resources from the block," Ambani said in the company's annual report for 2012-13.
While RIL-BP have planned various activities including work-overs, side tracks and compressor addition to maximise recovery from the existing wells, new production would be added in 4-5 years using existing infrastructure, he said.
"The field development plan for the R-Series project (in the KG-D6 block) has been submitted to the Government of India for approval. This along with other projects is expected to add incremental production in the next four to five years," he said.
RIL has discovered 18 gas fields in KG-D6 block. Of these, only two (Dhirubhai-1 and 3) have been put to production. Satellite fields are now being planned to be developed.
"We believe gas from these projects will deliver energy to millions of Indians and would significantly help India in reducing import dependence," Ambani added.
RIL said average production from KG-D6 block during 2012-13 was 26 mmscmd of gas and 9,225 barrels of oil per day.
"The fall in production is mainly attributed to geological complexity, natural decline in the fields and higher than envisaged water ingress," the annual report said.
To augment production from the current fields (D1-D3 and MA), various Base Management actions including work overs, side tracks, compressor, enhancement of water handling capacity and a new well in the MA field will be undertaken in FY 2013-14.
"The next wave of projects in KG-D6 block are envisaged to be undertaken over the next three to five years and entail a potential total investment in excess of $5 billion to develop around 4 trillion cubic feet (TCF) of discovered natural gas resources," RIL said.
At current international LNG prices, it would cost more than $50 billion to import this volume of gas into India.
The field development plan for R-Cluster, submitted in January 2013, proposed to maximise infrastructure utilisation of existing D1 and D3 hub.