RIL to invest $5bn in KG basin to raise output

Plans to develop 4 trn cubic feet of discovered NG resources With gas output from its flagship KG-D6 fields dipping to an all-time low, Reliance Industries Ltd Chairman Mukesh Ambani has revealed that the company will invest over $5 billion in "a series of projects" to reverse the trend. RIL and its British partner BP plc have already submitted plans to bring to production the satellite fields in the eastern offshore KG basin and to raise output. The production in the KG basis has plummeted to less than 16 mmscmd from about 64 mmscmd achieved three years ago. "We are planning to invest in a series of projects to develop around 4 tn cubic feet of discovered natural gas resources from the block," Ambani said in 2012-13 annual report. While RIL-BP have planned various activities including work-over, side tracks and compressor addition to maximise recovery from the existing wells, new production would be added in 4-5 years after using the existing infrastructure, he said. "The field development plan for the R-Series project (in the KG-D6 block) has been submitted to the Government for approval. This along with other projects is expected to add incremental production in the next 4 to 5 years," he said. RIL has discovered 18 gas fields in KG-D6 block. Of these, only two (Dhirubhai-1 and 3) have been put to production. Satellite fields are now being planned to be developed. "We believe gas from these projects will deliver energy to millions of Indians and would significantly help India in reducing import dependence," Ambani added. RIL said average production from KG-D6 block during 2012-13 was 26 mmscmd of gas and 9,225 barrels of oil per day.A "The fall in production is mainly attributed to geological complexity, natural decline in the fields and higher than envisaged water ingress," the annual report said. "The next wave of projects in KG-D6 block are envisaged to be undertaken over the next three to five years and entail a potential total investment in excess of $5 billion to develop around 4 trillion cubic feet (TCF) of discovered natural gas resources," RIL said. At the current international LNG prices, it would cost more than $50 billion to import this volume of gas into India. The field development plan for R-Cluster, submitted in January 2013, proposed to maximise infrastructure utilisation of existing D1 and D3 hub. "The company is creating a project pipeline for the next wave of oil and gas development, which includes satellite discoveries in KG-D6 block. It aims to install minimum essential, safe and suitable incremental facilities for R-Cluster's integration. Similarly, development of all satellite discoveries is being planned as part of an integrated concept," RIL said. Additionally, potential upside through resource accretion is being targeted by undertaking exploration drilling in the existing production area with the approval of Government, the company said. By the end of 2012, fields in the KG-D6 block had produced 2 tcf of gas and 22 million barrels of oil, saving nearly $35 billion in energy imports. "To complement the existing asset base, RIL continues to look at new opportunities globally that are a strategic fit with capabilities and integrated petroleum value chain," the company said, adding that it aspires to become a global top 10 independent hydrocarbon producer. In its second year of the partnership, RIL and BP combined their expertise in deepwater exploration and development and operations in India.