Reliance Industries Ltd (RIL) and its partners are making all efforts to keep alive their two producing fields at the KG basin block off the Andhra coast, according to P.M.S. Prasad, Executive Director and CEO - Petroleum Business. At the same time, he added, gas pricing should be market-driven.
“We do hope we maintain the D6 block output at 14-15 mmscmd (million metric standard cubic metres per day),” Prasad told reporters on the sidelines of the Petrotech 2014 conference here.
RIL and its partners in the block — BP and Niko Resources — have been under public glare since output from the D-1 and D-3 fields started to decline after hitting a peak of 61 mmscmd.
The current output from the fields is 8.5 mmscmd.
Together with the MA fields, the total production from the block today is close to 13 mmscmd. The contractors have been maintaining that they won’t be able to drill any more wells in the D-1 and D-3 fields.
The output drop has also resulted in RIL attracting the Government’s ire, with allegations that the contractors are not drilling enough wells due to low gas price. However, RIL has stated the drop is because of geological reasons.
Asked if RIL has heard from the Government about the bank guarantee amount, which it has to pay to benefit from the new gas price, Prasad said: “No decision has been communicated.”
Asked whether the new gas price makes other discoveries in D6 viable, he said: “It’s difficult to say right now, but in some fields, it may be viable.”
“We cannot control the prices. We must consider that the input costs are increasing. While the costs are not in your hand, you are trying to control the price... this is absolutely wrong.”
RIL had said in a statement the Rangarajan Committee formula adopted for the new gas price was a step in the right direction.
However, gas sales under the new exploration licensing policy have to be at competitive arm’s-length market prices.
“Accordingly, we hope the same momentum is maintained and, according to the production sharing contract, gas markets are allowed to develop and transition to market price soon,” a company spokesperson had said.
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