Reliance Industries gas output falls to all-time low; shuts 8th well in KG-D6 block

Reliance Industries Ltd (RIL) has shut its eighth well on the main gas fields in KG-D6 block, leading to output plummeting to all time low of 20.88 mmscmd (million metric standard cubic meter per day).

RIL, on January 9, shut the well B6 on the main producing fields of Dhiburbhai-1 and 3 (D1&D3) in Krishna Godavari basin KG-D6 block "due to water loading," according to a status report of the Directorate General of Hydrocarbons (DGH).

Previously, on November 29 it had shut B4, the seventh well on D1&D3 field.

The latest shutting led to the output slipping from D1&D3 to 16.98 million standard cubic meters per day during the week ended January 13, the report said. Together with 4.37 mmsmcd from MA oilfield in the same block, the output totalled 21.35 mmscmd in the week.

However, the production has since plummeted further to 20.88 mmscmd this week, the lowest level since D1&D3 started production in April 2009.

The output has fallen from 22.04 mmscmd in December end, when D1&D3 produced 17.66 mmscmd and MA 4.38 mmscmd.     

RIL has so far drilled 22 wells on D1&D3 fields but has put only 18 on production so far. D1&D3, which started gas production in April 2009, had touched a peak of 55 mmscmd in August 2010 before beginning of water and sand ingress in wells.

The same problem has led to shutting of one-third of the wells on MA oilfield in the same block. Output from MA is half of the peak rate it had achieved in 2010.

Sources said RIL had last year proposed to do work-over or maintenance job to revive sick or closed wells but the Oil Ministry and DGH are yet to give their go ahead.

The $100-120 million spending in the work-over is part of the capital Budget for current fiscal which along with the same for 2010-11 and 2011-12 is pending approval.

Oil Ministry says it has withheld approvals pending RIL agreeing to give the Comptroller and Auditor General (CAG) access of its books to conduct a second round of audit. The audit has since begun but the approvals haven't come yet.

Of the 21.35 mmscmd of cumulative production from January 7 to 13, 14.54 mmscmd was sold to fertiliser plants and 4.02 mmscmd to power plants. The remaining 2.79 mmscmd gas was consumed by other sectors such as LPG and the East-West pipeline which transports fuel from east coast to the west.

RIL, the report said, has projected an output of 22 mmscmd in January.

RIL has so far made 1 oil and 18 gas discoveries in the Krishna Godavari basin block in Bay of Bengal. While the lone oil find, MA went on stream in September 2008, largest among the gas finds, D1&D3 were put on production in April, 2009.