Sunday 20 April 2014
News updated at 9:23 PM IST
Weather
Max: 35°C
Min : 22°C
In Bangalore
Partially cloudy

Reliance to invest $6.5 bn to regain lost glory of KG-D6

New Delhi, Jul 21, 2013 (PTI):
Reliance Industries KG-D6's control and raiser platform is seen off the Bay of Bengal in this undated handout photo. India's Reliance Industries Ltd resumed crude oil production from its east coast MA-1 field on March 8 following an emergency shutdown in December, Upstream Regulator V.K. Sibal said on March 12, 2009. REUTERS

Reliance Industries plans to invest USD 6.5 billion in its KG-D6 gas fields to re-attain natural gas production of up to 60 mmscmd by 2019-20 and regain the lost glory of the prolific block.

"We can attain a production level of 40 to 60 million standard cubic meters per day (mmscmd) by 2019-20 provided we get timely approvals and the right natural gas price," RIL President & Chief Operating Officer (E&P) B Ganguly told PTI.

The Bay of Bengal KG-D6 fields, which began gas production in April 2009, had hit a peak of 69.43 mmscmd in March 2010 before water and sand ingress led to shutting down of more than one-third of the wells. Current output is just over 14 mmscmd.


While the company carries out remedial measures to augment production from the currently producing Dhirubhai-1 & 3 (D1&D3) and MA fields, it plans to invest USD 3.155 billion in producing 20 mmscmd of gas from R-Series discoveries in the block and another USD 1.529 billion in four satellite fields to produce 10 mmscmd.

Another USD 1.2 billion is planned to be invested in other discoveries in the block, he said.

The company will invest USD 747 million in augmenting production from D1&D3 and MA fields by putting up booster compressor and repair work at the closed wells.

Besides USD 6.451 billion, another USD 6.151 billion is expected to be spent as operating expenses, he said.

These investments were besides the USD 7.572 billion the company has already sunk in development of D1&D3 and MA fields, USD 1.261 billion of operating expenses and USD 1.094 billion in exploring for oil and gas in the block.

Ganguly said such large investments were viable at no less than USD 7.5 per million British thermal unit gas price after considering the cost of capital and royalty paid to the government on production.

"First gas from the satellite developments is expected in mid-2017-18," he said adding the company has not made investment or production projections of the giant MJ1 discovery made 2-km below D1&D3 field recently.

MJ1 may hold 2-3 trillion cubic feet of reserves, almost equal to reserves in D1&D3 fields.

RIL says MJ1 and most of the other discoveries in the KG-D6 block were uneconomical to develop at the current USD 4.2 per mmBtu price.

It is drawing comfort for the future investments from the government approval of the Rangarajan formula for pricing of gas according to which the rate in April 2014 would be USD 8.2-8.4.

"The key to these developments is timely approvals and gas price. If we don't get the right price, the gas will remain in the ground," he added.

Go to Top

Photo Gallery
Amrita Rao walks the ramp for ‘Ramp for Champs’ organised by Smile foundation to raise fund for ...

Amrita Rao walks the ramp for ‘Ramp for Champs’ organised by Smile foundation to raise fund for ...

Phoenix International Autonomous Underwater Vehicle (AUV) Artemis launched by Australian Defense...

Phoenix International Autonomous Underwater Vehicle (AUV) Artemis launched by Australian Defense...

Men of the traditional Sorbian community ride on decorated horses during the traditional Easter...

Men of the traditional Sorbian community ride on decorated horses during the traditional Easter...

A team perform at the 28th International kite festival in Berck, France...

A team perform at the 28th International kite festival in Berck, France...

Coptic Pope Tawadros II, center, swings an incense burner as he walks down the aisle during...

Coptic Pope Tawadros II, center, swings an incense burner as he walks down the aisle during...

This frame grabbed image from NASA-TV Sunday April 20, 2014 shows the SpaceX Dragon resupply...

This frame grabbed image from NASA-TV Sunday April 20, 2014 shows the SpaceX Dragon resupply...

A farmer trying to drain out water from his wheat field with the help of a bucket after heavy...

A farmer trying to drain out water from his wheat field with the help of a bucket after heavy...

New Naval Chief Admiral Robin K Dhowan after inspects a Guard of Honour at Defence Headquarters...

New Naval Chief Admiral Robin K Dhowan after inspects a Guard of Honour at Defence Headquarters...

After 10 long years the Santa Cruz-Chembur Link Road was finally thrown open to public in...

After 10 long years the Santa Cruz-Chembur Link Road was finally thrown open to public in...

Pope Francis lifts up the chalice as he leads a vigil mass during Easter celebrations ...

Pope Francis lifts up the chalice as he leads a vigil mass during Easter celebrations ...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523