RIL KG-D6 output falls to less than 35 mmscmd

Reliance Industries' flagging KG-D6 fields have seen natural gas output dropping to less than 35 million standard cubic meters per day after one-third of wells had to be shut due to water and sand ingress.      

RIL, in a status report filed with the Oil Ministry, stated that natural gas production from the Dhirubhai-1 and 3 gas fields and the MA oilfield in Block KG-DWN-98/3, or KG-D6, in the Krishna-Godavari Basin of the Bay of Bengal, was 35.77 mmscmd in the week ended February 5.

Sources said the output dipped to 34.5 mmscmd in the subsequent week.

The output during January 30 to February 5 comprised of 29.22 mmscmd from the D1&D3 gas fields and 6.55 mmscmd from the MA oilfield.

The KG-D6 production is lower than 61.5 mmscmd rate achieved in March, 2010, before a drop in pressure in the wells and increased water and sand ingress pulled down per well gas output.

The report said of the 18 wells drilled, completed and put on production in the D1&D3 fields, six wells -- A2, A6, A10, B1, B2 and B13, were kept closed due to high water cut/sanding issues.

Sources said till last month 13 wells were producing and a sixth well -- A6 -- was shut recently.

In its projections for the next two fiscals, RIL has stated that the KG-D6 output will fall further to 27.60 mmscmd in 2012-13 and to 22.60 mmscmd in 2013-14.

This will be the lowest output since RIL began production from KG-D6 block in April 2009.

Sources said RIL in its projections has stated that output from D1&D3 in 2012-13 would be 20.20 mmscmd and another 7.40 mmscmd will come from MA oilfield. In the subsequent year, production from D1&D3 would further drop to 14 mmscmd, while MA oilfield is expected to produce 8.60 mmscmd.

The output from KG-D6 is short of the 70.39 mmscmd (61.88 mmscmd from D1&D3 and 8.5 mmscmd from MA field) level envisaged by now as per the field development plan approved in 2006. Production was to touch 80 mmscmd by April, 2012 after all the 31 wells envisaged in the development plan are drilled and brought to production.

RIL has so far drilled 22 wells on Dhirubhai-1 and 3, two of the 18 gas finds in the KG-D6 block that have been brought to production, but only 18 were put on production. Of these 18, six have ceased due to water/sand ingress.      

MA oilfield in the same block had seen one out of the five wells cease due to the same reasons.

RIL is the operator of the 7,645-sq-km D6 block with 60 per cent stake while London-based BP plc has 30 per cent interest. The remaining is with Niko Resources of Canada.

According to RIL status report, the MA oilfield, where one of the five oil wells had been shut due to water loading, produced about 11,882 barrels of crude oil per day in the week ending February 5. In addition, 1,578 barrels of condensate are produced from the field every day.

The report said 14.66 mmscmd of the gas output was sold to fertiliser plants and 18.02 mmscmd to power plants. The remaining 3.09 mmscmd was consumed by other sectors, including compressors and internal use of the East-West pipeline that transports gas from the East Coast to consumption centres in the West.    

Niko had last week warned that KG-D6 fields may see a further decline in output until new wells are brought to  production.

The Canadian firm said its share of D6 gas production in December averaged approximately 137 million cubic feet per day mmcfd (38.79 mmscmd for the entire block).

"Declines are expected to continue until work overs are completed and/or additional wells are tied in," it said, adding that RIL was to do workovers or maintenance of the six closed wells which may raise the output.