RIL details KG D6 production declines, cites complexity

Reliance Industries Ltd., Mumbai, has blamed “reservoir complexity and natural decline in reserves” for disappointing production of crude oil and natural gas from the KG D6 block, which has yielded a series of large discoveries in deep water offshore eastern India (OGJ Online, Sept. 9, 2011).

The Directorate General of Hydrocarbons has been pressuring RIL to drill more wells in the Bay of Bengal block because of production shortfalls against initial projections. RIL says its development practices are sound (OGJ Online, Aug. 4, 2011).

In a report to the Indian parliament last month, the Ministry of Petroleum and Natural Gas said DGH attributed a decline in gas production from two major fields in the area, D1 and D3, to the drilling of only 22 wells—18 producers and 4 drilled but not placed on production—against 31 approved for production through March 2012. The ministry said RIL “has expressed inability to firm up appropriate drilling locations on plea of geological complexities.” It said DGH continued to dispute RIL’s explanation.

The ministry also said RIL had reported 5 of the producing wells in the fields had ceased flow due top water loading and sand ingress. One well in a third field, MA, with six oil and gas producing wells also had watered out, it said.

In a new financial report, RIL said KG D6 oil production for the 9 months ending Dec. 31 totaled 3.87 million bbl, down 39.8% from the same period a year earlier. Gas production totaled 436.4 bcf, down 21.9% from the earlier period.

Condensate production increased 4% between the periods to 580,000 bbl.

RIL said it has approved development of four satellite discoveries in the block.

KG D6 is one of 21 blocks in which BP PLC last year completed purchase of 30% interests from RIL in a deal forming a joint venture by the companies for Indian exploration and development (OGJ Online, Aug. 30, 2011).