Reliance Industries along with its partner BP PLC has decided to boost the production from their eastern offshore KG-D6 block. The two companies will increase the production of natural gas and aims to get an output, which is around three times the current production, by 2021-2022. They expect to earn fair gas price and thus cover their exploration risk.
Meeting at PMO
Reliance Industries and BP presented in a meeting held last week at Prime Minister’s Office (PMO).Principal Secretary to Prime Minister, NripendraMisra,Finance Secretary, Rajiv Mehrishi, Member of NITI Aayog, BibekDebroy, Cabinet Secretary,Ajit Seth and Chief Economic Advisor,Arvind Subramanian attended the meeting. Some dignitaries from oil and coal ministries were also present.The meeting was conducted to check obstacles arising in exploration and analyze the companies’ gas production plans.
In this, the companies mentioned that KG-D6 block produced 11.5 million standard cubic meters per day of gas in the last quarter of Financial Year 2014 – 2015. They expect the production to reach to 30 – 35 million metric standard cubic meters per day(mmscmd) of gas in 6 to 7 years. They also informed that this increase in the production will be an outcome from R-series, MJ-1 fields, 4-satellite and other satellite fields.
The two companies along with government-owned, Oil and Natural Gas Corporation (ONGC) asked for profitable prices for natural gas to overcome their exploration risk. Companies spend millions in exploring. Moreover, they do not get any return if there is no discovery. The private operators want the State to make a plan for the changes occurring in the market prices. At present, the gas price is of USD 4.66 per million British thermal unit.The State-owned company, ONGC informed that its discoveries are not feasible at this price.
Production expected from the discoveries
Sources informed that Reliance Industries and BP are working to get an output of 13-15 mmscmd of gas for 13 years from discoveries of D-34 or R-Series inblock KG-DWN-98/3 or KG-D6. It is predicted that the discovery has around 2.2 trillion cubic feet of reserves. To produce gas from it, USD 3.18 billion is being invested.The four satellite gas discoveries are D-2, D-6, D-19 and D-22. These have 617 billion cubic feet of reserves. For eight years, this discovery mayproduce 10.36 mmscmd of gas. Hence, Reliance Industries and BP are spending around USD 1.529 billion to develop these fields.Some other satellite fields like D-29, D-30, D-31 and MJ-1 will also be developed.
Reliance Industries’ discoveries
Reliance Industries has made 19 gas discoveries, till date, along with 1 oil find in the KG-D6 block. The biggest of these were D-1 and D-3. Production in these fields began in April, 2009. In a year, the output obtained was 54 million metric cubic meters per day (mmcmd) which then became 6.16 mmscmd, last quarter. Besides, 5.07 mmcmd of associated gas is obtained from the MA oilfield that is located in the same area.