Reliance starts fresh drilling in KG-D6 offshore block

Reliance starts fresh drilling in KG-D6 offshore block

Mumbai: Reliance Industries (RIL) and its foreign partners BP and Niko Resources have commenced fresh drilling at the D1 and D3 fields, the mainstay of their KG-D6 offshore block in the Krishna-Godavari basin in eastern India, with the idea of increasing the block’s output.

Production at the KG-D6 block is currently hovering at around a dismal 11m metric standard cubic metres per day (mscmd), a far cry from the peak of over 69m mscmd achieved in early 2010. The ‘sidetrack drilling’, which is done to raise production from a block to extract reserves not possible by regular drilling, will cost $60m to complete.

“A rig has been deployed, costing $395,000 per day,” a Reliance source said. “If the results from the first well appear positive, the company could expand the 65-day sidetracking programme.”

Incidentally, RIL and its two foreign partners are yet to decide on whether or not to conduct the statutory drill stem test (DST). Given that two explorers – state-run ONGC and RIL – ended up fighting with oil regulator Directorate General of Hydrocarbons (DGH) over the latter’s diktat to conduct the DSTs at their hydrocarbon finds in the KG basin, the government last came out with a policy change whereby the DST with a 50% cost recovery is optional.

Sources said RIL might club its KG basin discoveries along with other satellite finds into an integrated field development plan. It would take at least two-three years for the firm and its partners to commence gas production from these discoveries.

Shirish Nadkarni

Shirish Nadkarni is a management consultant and freelance international journalist, who has been writing on all spheres of Indian business for the past three decades for a number of reputed overseas publications. An avid sportsman, Nadkarni has represented India in international veterans' badminton since 1997, and was the 55+ age group doubles world champion in 2005.

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