New Delhi: Reliance Industries and its partner BP plc of UK have invested over Rs 4,500 crore in the flagging eastern offshore KG-D6 block to maintain gas output at current level despite the steep natural decline that has set in in the seven-year old fields.
RIL-BP are currently producing from Dhirubhai-1 and 3 gas field and MA oil and gas field, three of the over one-and-half dozen discoveries made in the Bay of Bengal Block KG-DWN-98/3 or KG-D6.
The fields, which began gas production in April 2009, hit a peak output of 69.43 million standard cubic meters per day in March 2010 before water and sand ingress shut down well after well.
The fields are on steep natural decline and RIL-BP have have spent over `4,500 crore to arrest the decline and continue to increase the ultimate recovery of gas, sources said. The block is currently producing 8.7 MMSCMD.
Currently, RIL-BP are in the process of sidetracking (drilling) two of their existing wells and drilling away from the water to increase recovery of gas. Side-track campaign has also been initiated in MA field.
Sources said the existing and enhanced production from these fields only get the price as per the formula that was approved in November 2014. Price according to this formula currently is $3.06 per million British thermal unit and is expected to be revised lower in October 2016.
At these prices, leave alone new investment, even the base business will struggle to yield any profits, they said. Sources said RIL-BP have started working developing R- Series and satellite discoveries....