Reliance Industries' new gas discovery likely biggest ever: oil minister

Reliance Industries (RIL), which has come under criticism over the falling gas production from its KG-D6 basin, got a boost when oil minister Veerappa Moily said the oil & gas major's recent gas discovery could be the biggest ever in the country.

Mukesh Ambani-owned RIL in May this year had announced a huge natural gas discovery, possibly the biggest find ever in the country. The new discovery could be the key to arresting the falling output from KG-D6 block.

Addressing a press conference, Mr Moily said RIL's new gas discovery could be the biggest ever in the KG basin.

The discovery, named 'D-55', has been notified to the government of India. This discovery is expected to add to the hydrocarbon resources in the KG D6 block. RIL is the operator of KG D6 with 60 per cent equity. BP has a 30 per cent share and NIKO the remaining 10 per cent.

Reliance Industries'  D-55 gas discovery, which is located two-kilometers below the currently producing fields in the eastern offshore KG-D6 block, may span about 60 square kilometers, RIL's partner NIKO recently said.

RIL shares were flat today, trading at Rs. 850 on the BSE at 12:14 pm. The falling gas output from the KG-D6 wells have been a drag on the RIL's shares which have not been able to outperform the broader markets despite good performance from its refining and petrochem businesses

Source: NDTV

RIL to repair wells to increase KG-D6 gas output

Reliance Industries will repair a third of the wells shut at its main gas field in the eastern offshore KG-D6 block to boost output in the first quarter of 2014.

RIL closed half of the 18 producing wells at the Dhirubhai-1 and 3 gas fields in the KG-DWN-98/3, or KG-D6 block, due to sand and water flooding, leading to an 85 per cent output drop at 9.4 million standard cubic meters a day.

The company is mobilising a drilling rig for the D1&D3 fields "to commence a three-well workover programme that is expected to increase the volumes from this field in the fourth quarter of the fiscal year (ending March 31, 2013)," said Niko Resources, a minority partner in the KG-D6 block.

Workover is the process of performing major maintenance or remedial treatment on an oil or gas well.

Niko, which holds a 10 per cent interest in the KG-D6 block, said in its second-quarter earnings statement that the workovers will "contribute" to an increase in gas production.

BP Plc of UK holds the remaining 30 per cent in KG-D6. RIL, the operator of the block with a 60 per cent stake, produced 12.26 mmscmd from the D1&D3 gas fields and the MA oil and gas field in the block in the Bay of Bengal in the week ended October 27, according to a status report of the Directorate General of Hydrocarbons (DGH).

RIL had also shut two of the six wells at the MA field due to high water and sand ingress. The DGH report said the D1&D3 fields produced 9.39 mmscmd of gas, while the remainder came from the MA field.

The KG-D6 fields, which began gas production in April 2009, hit a peak output of 69.43 mmscmd in March 2010 before water and sand ingress shut down well after well.

D1&D3, the largest of the 18 gas discoveries in the KG-D6 block, produced 66.35 mmscmd, while 3.07 mmscmd was the output from the MA field, the only oil discovery on the block.

Besides the fall in output from D1&D3, gas production from the MA field, which had hit a peak of 6.78 mmscmd in January 2012, has dropped.

Niko said a development well, MA-8, has been spud at the MA field. "The well is expected to be on-stream in December."

The well and the workovers will help reverse the drop in output at KG-D6.

Sources said the workovers had been stuck for almost two years as the Oil Ministry and the DGH refused to approve their budgets. They were cleared only after Oil Minister M Veerappa Moily intervened.

The DGH report said 12 mmscmd of the last reported output at KG-D6 was sold to urea manufacturing plants and no sale was made to power plants. The remaining production was consumed by the pipeline that transports the KG-D6 gas, it said.

Source: http://profit.ndtv.com/news/corporates/article-ril-to-repair-wells-to-increase-kg-d6-gas-output-372454