Reliance Ind says other discoveries need to be developed

Reliance Industries Ltd (RIL) expects ‘no new production from D1- D3 fields’, the largest in the D6 block.

But other discoveries in the block can be developed using the existing infrastructure so as to help reduce overall capital spend by $1 billion.

RIL, which has been facing criticism including that of hoarding gas in the D1 and D3 fields and cost escalations, has written to the Petroleum and Natural Gas Ministry stating that all available technical information shows that adding new wells in the D1- D3 fields will not add to production.

According to current estimates, the output from the D6 block is unlikely to exceed 70 mmscmd, while initial estimates had put the output from D1 and D3 alone at 80 mmscmd.

The output from D6 block (D1,D3 and MA fields), after peaking at 67 mmscmd in 2009-10, fell to 24 mmscmd in 2012 (around 19 mmscmd from D1, D3 and around 4 mmscmd from MA field).

Gas Hoarding

On the issue of gas hoarding, RIL Executive Director P.M.S. Prasad, in a letter to the Ministry, said: “…hoarding gas in the case of D1 and D3 reservoirs is a technical impossibility. Oil and gas reservoirs are dynamic systems and not inert cold storage facilities. They are both subject to and respond to production rates and flow.”

Prasad said that D1 and D3 facilities are designed to provide information on actual gas production and potential of the reservoir. Both under- and over-production would be easily noticeable. Further, he said, globally oil and gas fields are known to be unpredictable and reserves are ‘estimates’ in the true sense of the term.

“The D1-D3 field, known for its complexity and harsh working environment, has similarly not performed in the manner that was anticipated, in spite of the contractor’s (RIL) best efforts. RIL has at all times kept the Government informed that the D1-D3 reservoir has thrown unanticipated surprises and has shared all the relevant information and data,” he said.

The Petroleum Ministry has so far not accepted the reasons cited by the contractor for the fall in output from D1-D3 fields in the block.

Technical experts

“If there are any genuine technical doubts about the information or results supplied by the operator (RIL), there was always the option of appointing a team of internationally reputed technical experts, familiar with deep water depositional systems, to assess the reservoir conditions,” Prasad said, adding that “in fact, we have on several occasions raised the issue of appointing such technical experts, so that misinformation would be averted.”

Awaiting Approvals

As on Wednesday, RIL was still awaiting formal approval from the Government to start drilling well G2 in D19 satellite discoveries in the block. The rig to undertake this activity has arrived.

(This article was published on November 28, 2012)
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