Drilling activity starts from Sunday

Reliance Industries-operated D6 block on the east coast, which has of late been at the centre of controversy regarding dwindling output, saw some positive activity starting Sunday (December 2).

RIL and its D6 partners BP and Niko Resources started drilling work at one of the satellite fields in the block in an effort to increase output from country’s largest gas fields. Once the development activity is completed at this satellite field, it is expected to add another 10 mmscmd to the block’s production.

Under scrutiny

Production from this satellite area is expected in 2015-16. D6 has been under Government as well as public scrutiny because of the operators’ inability to check the falling output.

The current output from the producing fields (D1, D3 and MA fields) in the block is 23 mmscmd. The production had hit a peak of 60 mmscmd in end 2009, before reporting a consistent decline. While the D1-D3 fields fall in the North-West area of the block, this satellite is North of D1-D3 and closer to ONGC’s KG-DWN-98/2.

The operator (RIL) and its partners are drilling well G2 in D19 satellite discoveries in the block. The rig to undertake the activity arrived on November 27 and is on long-term lease. It is part owned by RIL and partly by Transocean. A single drilling operation costs around $30-50 million and an equivalent amount goes into hooking the well for production, sources said.

If all the four satellite fields, coupled with the R-Series discovered in the D6 block, go on stream, estimates show that the operator can produce an additional 30 mmscmd. After drilling the G2 well, the operator and its partners will use the rig to drill two more priority wells.

Approval for this has been accorded by the management committee for drilling this development well (G2).

Audit issue

The D6 block is seeing drilling activity after almost 15 months. However, the company still maintains that it is open to Comptroller & Auditor General (CAG) audit, as prescribed under the production sharing contract (PSC). This is still a bone of contention between the Government auditor and RIL.

The CAG has reportedly been asking the Petroleum Ministry not to give the go-ahead to RIL’s D6 investment plans till the operator agrees to an unconditional audit. The Directorate-General of Hydrocarbons has given the contractor its permission to undertake drilling activity in one of the four satellite fields of the D6 block.


(This article was published on December 4, 2012)
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