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Monday, April 25, 2011

India's Reliance to Explain Falling Gas Output from Kg D6

India's Reliance to Explain Falling Gas Output from Kg D6

Monday, April 25, 2011
Asia Pulse Pte Ltd

India's oil regulator Directorate General of Hydrocarbons (DGH) will summon Reliance Industries next month to seek explanation on falling output from Eastern Offshore KG D6 gas deal.

"The explanation that they have given is not sustainable. We will call Reliance and its partner Niko Resources of Canada in first week of May to explain the situation," S K Srivastava, Director General of DGH said here.

Reliance has seen gas output from KG D6 drop to 50 million metric standard cubic meters per day (mmscmd) from 61.5 mmscmd production level achieved in March 2010.

Srivastava said output from KG D6 should have been 51.8 mmscmd in April 2011 as per the Field Development Plan (FDP) submitted by Reliance and approved by the DGH and the government.

"Reliance, according to the FDP was to drill 22 wells by April 2011. Against this, it has so far completed 18 wells on KG D6. Another two wells have been drilled but not completed," he said.

According to FDP, Reliance is to drill a total of 31 wells by 2012, to raise output to 80 mmscmd, Srivastava said adding that the DGH will seek an explanation from Reliance on the shortfall in drilling of wells at the May meeting.

Reliance holds 90 percent stake in KG D6, while Niko has the balance 10 percent.

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