Companies

Reliance shuts its only oil field in KG-D6 block after reserves dry up

Our Bureau Mumbai | Updated on September 21, 2018 Published on September 21, 2018

A view of Reliance KG D6

Reliance Industries Ltd has shut its only oil field (MA-D26) in the Krishna-Godavari basin block (KG-D6) after the reserves depleted completely, closing the door on an asset in which it had spent close to $2 billion.

Mukesh Ambani-owned Reliance on Friday announced that the MA (D26) field has ceased production, a decade after it started producing oil in September 2008.

Post cessation, activities related to safe shutdown of the field are underway, it said in a statement.

“Production from the field had been under natural decline and facing continuous challenges due to high water production and sand ingress. The field has cumulatively produced about 0.53 trillion cubic feet of gas and 31.4 million barrel of oil and condensate and had no remaining reserves,” the company said.

For Q1 FY19, the MA field contributed less than 0.1 per cent of revenue at the consolidated level for Reliance.

The statement further said: “The Dhirubhai – 26 (D26), oil, gas and condensate deep water discovery was made in 2006... It was India’s first deep water development (water depth up to 1,250 metres), with seven wells tied back through a subsea production system to a purpose built, state of the art dis-connectable turret moored Floating Production Storage and Offloading facility.”

The relevant governmental agencies had been informed of the permanent shutdown of the field, the company said in a filing to the stock exchange.

Reliance has till date made 19 oil and gas discoveries in the KG basin. It is the joint operator of KG-D6 block with 60 per cent interest, while BP Plc of the UK holds a 30 per cent stake. Niko Resources Ltd of Canada holds the balance 10 per cent.

Discoveries in focus

Reliance is now focussed on developing other discoveries — R-Cluster, Satellite Cluster and MJ fields in KG-D6 block — at a cost of ₹40,000 crore. These fields together will bring 30-35 million metric standard cubic metres per day of peak output.

Published on September 21, 2018
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