'Gas output from RIL's D6 block is down due to fewer wells'

Gas output from Reliance Industries-operated D6 block, off the Andhra coast, has declined as it drilled fewer wells than planned and six wells have ceased to produce due to the entry of sand or water, oil minister Jaipal Reddy said on Thursday.

Reliance has drilled 22 wells at D1 and D3 gas fields in the block, four of which are yet to go into production, against 31 producing wells approved for drilling up to March 2012 in the field development plan (FDP), Reddy said in a written reply to lawmakers.

“The contractor has neither drilled the remaining nine producing wells nor taken any alternative action such as revision of the FDP for approval of management committee as per the provision of the production sharing contract,” he wrote.

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Five out of 18 gas producing wells in the two fields have stopped production due to water loading and sand ingress, Reddy said, adding, one well in the MA oil field out of six producing wells has stopped output due to water loading.

Reliance’s share price has fallen over 29 percent this year, underperforming the broader index, on investor worries about declining output at its key offshore India gas field.

This year, Reliance brought in the expertise of BP to help it on the offshore D6 block, where output is lagging targets, and the British company has said production from the field off India’s east coast could rise from 2014.

Reuters