Govt go-ahead to RIL's $1.53 bn KG-D6 satellite field plan

New Delhi: The government has approved Reliance Industries' $1.529 billion plan to produce over 10 million standard cubic meters per day of gas from four satellite fields in the flagging KG-D6 block.

RIL and its partners, BP Plc of UK and Niko Resources of Canada, are likely to start producing natural gas from the four fields around mid-2016, Minister of State for Petroleum and Natural Gas RPN Singh said today.

The investment plan, which will help boost falling output in the Krishna-Godavari Basin KG-D6 block, has been pending with the authorities for two years.

The KG-D6 block oversight committee approved the investment plan. Reuters

The KG-D6 block oversight committee, which includes officials from the Oil Ministry and its technical arm, the DGH, on 3 January approved the investment plan.

"The Management Committee of the block KG-DWN-98/3 (or KG-D6)... has approved Optimised Field Development Plan (OFPD) of four satellite gas discoveries namely D-2, 6, 19 and 22 in the block on 3 January at an estimated capital expenditure to the tune of $1,529.05 million," he said.

Replying to a question in the Lok Sabha, Singh said the four fields have 617 billion cubic feet of reserves and can produce gas for eight years.

"The contractor (RIL) has initiated activities related to the OFPD," he added.

The four fields can produce 10.36 million cubic metres of gas per day by 2016, which will help shore up output from the block, which has seen over 40 percent decline in production in the past 18 months to just over 34 mmcmd.

RIL has so far made 18 gas discoveries in the KG-D6 block.

Of these, D-1 and D-3 - the largest among the lot - were brought into production from April, 2009, but output has fallen sharply from 54 mmcmd, in March, 2010, to 28.16 mmcmd this month. Together with 6.46 mmcmd of associated gas produced from the MA oilfield in the same area, total production from the block amounts to 34.62 mmscmd.

The company had in July, 2008, submitted a FDP to exploit reserves of 1,708 billion cubic feet (bcf) in nine satellite gas discoveries (D-2, D-4, D-6, D-7, D-8, D-16, D-19, D-22 and D-23) in the D6 block at an estimated capex of $5.6 billion.

It later submitted an optimised development plan for four of the satellite gas fields (D-2, D-6, D-19 and D-22) at the end of 2009.

PTI