RIL in legal trouble over cost recovery at KG-D6 fields?

Oil minister S Jaipal Reddy has reportedly said that the government may have to send notice to Reliance Industries (RIL) to reduce cost recovery at its KG-D6 gas fields.

According to reports, RIL has drilled fewer number of wells than planned. The ministry blames fall in output from KG-D6 fields to 34.5 million cubic meters per day instead of 70.39 mmcmd planned for now and 80 mmcmd by April.

KG-D6 fields may see production drop to an all-time low of about 27 million cubic meters a day by April/May due to the entry of sand or water in the wells, a top oil ministry official said on Tuesday.

[caption id=“attachment_213808” align=“alignleft” width=“380” caption=“RIL has so far drilled 22 wells on Dhirubhai-1 and 3, two of the 18 gas finds in the KG-D6 block that have been brought to production, but only 18 were put-on production. Reuters”] [/caption]

Dhirubhai-1 and 3 (D1&D3) gas fields in KG-D6 block and MA oilfield in the same area produced about 30 mmcmd on debut and reached 61.5 mmcmd in March 2010 before water and sand ingress gradually brought down the output. Today, D1&D3 are producing about 27.5 mmcmd and MA another 7 mmcmd.

The official said the output from KG-D6 is short of the 70.39 mmcmd (61.88 mmcmd from D1&D3 and 8.5 mmcmd from MA field) level envisaged by now as per the field development plan approved in 2006. Production was to touch 80 mmcmd by April, 2012 after all the 31 wells envisaged in the development plan are drilled and brought to production.

RIL has so far drilled 22 wells on Dhirubhai-1 and 3, two of the 18 gas finds in the KG-D6 block that have been brought to production, but only 18 were put-on production. Of these 18, five have ceased due to water/sand ingress.

MA oilfield in the same block had seen one out of the five wells cease due to the same reasons.

With inputs from PTI