Experts to probe RIL KG-D6 gas output

Oil Minister M Veerappa Moily on Friday hinted that the government may appoint an international expert to ascertain the reasons for sharp fall in natural gas production at Mukesh-Ambani-led Reliance Industries’ KG-D6 fields.

“There are world renowned experts who definitely can go into these things and can come out with the truth. We don’t want to prevent any truth from coming out,” he told reporters on the sidelines of a conference organised by Indian Chamber of Commerce.

Oil regulator DGH has blamed RIL’s failure to drill committed wells for the gas output falling by 80 per cent to 10 million standard cubic metres per day from the main D1 & D3 fields in KG-D6 block, instead of rising to the planned 80 mmscmd.

On the other hand, RIL and its partner BP plc of UK feel that the reserves have dropped one-third to under 3 trillion cubic feet due to previously unknown geological factors and the undrilled quota of 11 wells would not increase production.

Moily’s ministry has been mulling appointing an international reservoir expert to ascertain facts.

“Truth is truth, nobody can prevent it, nobody can manoeuvre it,” he said, adding his ministry was “consciously” working towards unravelling the truth. DGH wants $1.786 billion penalty to be levied on RIL for its “failure” to produce projected quantity of gas as Oil Ministry in a parallel move wants the company to be denied the benefit of gas price revision upon expiry of current $4.2 per million British thermal unit rate in April 2014.

“The question is that if gas is available, yes gas is available. There experts who can find out,” Moily said.

Speaking at the conference, he said that his ministry will go “strictly according to the rules.”

“The government is not willing to deviate an inch from the Production Sharing Contract (PSC),” he said adding if one field was sick it did not mean the entire country was sick.

A KG-D6 block oversight panel headed by DGH had earlier this week refused to take a view on appointing renowned reservoir consultants Ryder Scott, DeGolyer and MacNaughton (D&M), Gaffney, Cline & Associates (GCA) or Netherland, Sewell & Associates to validate reasons for the fall in gas output.

Oil Ministry officials attending the one-hour long MC meeting did not convey any decision. RIL-BP feel drilling of the remaining 11 wells would require over $1.65 billion investment while the currently available reserves can be produced by spending around $0.5 billion in repairs and compression of existing wells.