Corporate Feb 21, 2012
New Delhi: Reliance Industries and partner BP plc have got government approval to prepare a plan to develop the third largest gas discovery in KG-D6 block that produce a little less than 15 million cubic meters of gas per day.
A block oversight committee, headed by oil regulator, a few weeks back approved commerciality of Dhirubhai-34 or D-34 gas find in the KG-DWN-98/3 or KG-D6 block, sources privy to the development said.
Once a discovery is declared commercial ie it can be exploited commercially, the operator prepares a field development plan (FDP) for bringing the find to production.
The Management Committee, which besides Directorate General of Hydrocarbons (DGH) also includes representative of oil ministry, however did not approve commerciality of D-29, D-30 and D-31 discoveries in absence of individual well tests of the finds.
RIL had taken to MC the declaration of commercility (DoC) of R-series cluster comprising of the four finds - D-29, 30, 31 & 34. But the MC approved DoC of only D-34.
Sources said DGH trimmed down inplace reserves at D-34 to 1.645 trillion cubic feet from 2.207 Tcf estimated by RIL-BP.
The MC approved drilling of 11 wells to produce 14.68 mmcmd of gas for 8 years beginning 2016-17.
The capital expenditure for developing D-34 was estimated at $2.338 billion.
But for D-29, 30 & 31, the MC rejected the DoC saying neither individual well tests confirming the discovery nor appraisal wells had been drilled to substantiate the finds, it said.
RIL-BP had estimated 749 billion cubic feet of in place reserves in the three discoveries that could produce 5.7 mmcmd of gas after making a capital expenditure of $877.2 million.
Sources said the MC had last month approved a $1.529 billion development plan for producing up to 10 mmcmd of gas from the Dhirubhai-2, 6, 19 and 22 (D-2, D-6, D-19 and D-22) fields in the KG-D6 block by 2016.
RIL with 60 percent stake is the operator of block KG-D6 where 18 gas and one oil discoveries have been made till date.
Of these, Dhirubhai-1 and 3 (D1&D3) gas finds and MA oil discovery have been brought to production.
BP holds 30 percent interest in the block where D1&D3 are the largest gas finds, while Niko Resources of Canada has the remaining 10 per cent.
Natural gas output from KG-D6 has fallen to 35.77 mmcmd this month after touching a peak of 61.5 mmcmd in March 2010 as water and sand ingress forced closure of six wells.
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