Reliance Industries has said the KG-D6 block oversight panel has approved its revised field development plan for the MA oilfield in the Krishna Godavari basin block but the government nominees haven’t signed on the approval for the past three months.
“Revised field development plan (FDP) for MA field (in the predominately gas-rich KG-D6 block) to enhance gas production,submitted in February 2012,was agreed by the Management Committee in August,” RIL said its second quarter earnings press statement and investor presentations.
The Management Committee,which is the highest decision making body for an oil and gas field,is headed by the Directorate General of Hydrocarbons (DGH) and also has senior officials of Oil Ministry on it. It also has representatives of the operator (RIL) and its partners (BP of UK and Niko Resources of Canada).
The resolution approving the revised FDP for MA field is yet “to be signed by the Government of India nominees,” RIL said.
The revised plan envisages drilling of “additional gas well and conversion of two oil wells in gas to accelerate production of reservoir gas,” it added.
RIL is the operator of the KG-D6 block with 60 per cent stake. BP plc holds 30 per cent while Niko has 10 per cent.
RIL has so far drilled six wells on the MA oilfield,the only oil discovery among the 19 oil and gas finds the company had made in the eastern offshore KG-DWN-98/3 or KG-D6 block.
Besides producing oil,the field also produces natural gas. But the closure of two out of the six wells due to high water and sand ingress has led to drop in output from over 8 mmscmd three years ago,to about 5.5 mmscmd this month.
Together with 21-22 mmscmd from the main Dhirubhai-1 and 3 (D1&D3) gas fields,KG-D6 output is currently around 27 mmscmd.
Sources said in the revised FDP,RIL has scaled down the investment required for developing the MA oilfield by USD 276 million to USD 1.96 billion.
RIL had in 2006 proposed to invest USD 2.234 billion in developing the Dhirubhai- 26 or MA discovery,the only oil find in KG-D6 block in Krishna Godavari basin off the east coast.
Besides gas,the field has also lagged behind targets in oil production. The field,which started production in September 2008,is producing less than half of the estimated peak output of 20,000 barrels of oil a day due to water and sand ingress in wells.
Sources said that in the revised plan,capital expenditure at MA field has been estimated at USD 1.96 billion as against a capex of USD 2.234 billion approved in 2006.
It is based on reduction in volumes — oil goes down from 159 million barrels to 122 million barrel and gas from 941 billion cubic feet to 924 bcf.
The lower capex includes allocation of USD 111 million for drilling of seventh well on the field and work-overs or maintenance of two existing ones,including the ones currently shut,at the cost of USD 164 million.
RIL had in the original field development plan for D1&D3 proposed a capital expenditure of USD 8.836 billion. Of this about 60 per cent has been spent so far.