Reliance Industries to Optimize KG-D6 Block to Increase Output

Sept. 28, 2011 - PRLog -- Mukesh Ambani led Reliance Industries Limited (RIL) is gearing up to augment the output volume from its most prolific oil and gas field in the Krishna – Godavari (basin (KG-D6) by 30-35 million metric standard cubic metres a day (mmscmd) by pumping natural gas from its latest discoveries in the deep-sea region and by developing common infrastructure across the block to optimize operational costs.

In this endeavor, Reliance Industries is being supported by the government and the technical arm of oil ministry – The Directorate General of Hydrocarbons (DGH). DGH recently appointed an independent consultant to suggest ways to optimize output from one of India’s largest oil and gas field located off the east coast of Andhra Pradesh.

The Krishna - Godavari basin block KG-DWN-98/3 (D6) has 19 oil and gas finds. Of these, Dhirubhai -1, Dhirubhai- 3 fields and an oil field MA are currently the largest and completely functional. While KG-D6 is producing about 45.4 mmscmd of gas per day, MA oilfield produces a little less than 15,000 barrels per day of oil and about 7.6 million standard cubic meters per day of natural gas from its five wells. KG-D6 has seen its output decline gradually to less than 45 mmscmd instead of rising to 80 mmscmd as anticipated in the field’s assessment. There are a few technical issues, which RIL is currently sorting with the assistance of its partner BP Plc., a London based energy major with expertise in deep sea exploration projects.

Given RIL owned KG-D6’s potential and valuation, government has agreed to support Reliance to bring about KG-D6’s volume to mitigate the burden on industries dependent on KG-D6’s output.Government has already sanctioned capital expenditure of $8.8 billion for the fields already under production. Of this $5.6 billion has already been utilized for the process of amplification and the remaining capex will be used to develop new areas in the block to raise production. Simultaneously, RIL is working on integrated development of the entire block to reduce the cost of developing related infrastructure for gas production and improve the field’s overall functionality.