Reliance strikes more gas in KG-D6 block

Find seen as one of the biggest discoveries in the country

Reliance Industries Ltd (RIL) today announced a "significant" gas and condensate discovery in the KG-D6 block, off the eastern coast.

It is seen as one of the biggest gas discoveries. The announcement comes after the government in February allowed RIL to drill further.

RIL is the operator of KG-D6, with 60 per cent equity. BP has a 30 per cent share and Niko holds the remaining 10 per cent.

The discovery, named D-55, has been notified to the government and the management committee, said the three partners. This discovery is expected to add to the hydrocarbon resources in the KG-D6 block.

According to a PTI report, sources said the resource found might be significantly more than a pre-drill best case gross prospective resource of 819 billion cubic feet of gas and 56 million barrels of liquids for the well.

The exploratory well, KGD6-MJ1, was drilled in a water depth of 1,024 metres - and to a total depth of 4,509 metres - to explore the prospectivity of a reservoir lying over 2,000 metres below the already producing D1-D3 gas fields. Formation evaluation indicates a gross gas and condensate column in the well of about 155 metres. In the drill stem test, the well flowed 30.6 million standard cubic feet per day (mscf/d) and a liquid rate of 2,121 barrels a day.

"The discovery follows an 18-month drilling time-out and detailed geoscience work that has re-focused our India exploration programme and delivered this early success," said Mike Daly, executive vice-president exploration, BP.

RIL did not give any reserve estimate for the new discovery but said appraisal would now commence to better define the scale and quality of the field. "We will embark on this programme in the next few months to evaluate the options for developing this discovery," said P M S Prasad, executive director, RIL.

RIL has 97,285 cubic metres of gas reserves, with the Dhirubhai-1 and 3 (D1&D3) gas fields being the largest among the 18 finds on the KG-D6 block. However, the reservoir has seen a sharp drop in pressure and water and sand ingress in production wells. According to official figures, the gas availability from KG-D6 has reduced to around 15 million standard cubic metres a day.

RIL has been pitching with the government for a rise in the price of gas from the field. The price has been frozen at $4.2 per million British thermal unit till March 31, 2014. "Gas prices in India can incentivise investment in the Indian upstream sector so that the production in India reaches optimum levels and all explorable reserves are put to production expeditiously," Petroleum Minister Veerappa Moily said in a statement issued earlier in the day. Moily was responding to an attack on him by the Communist Party of India's Gurudas Dasgupta.

By evening, his ministry issued another statement, saying the RIL discovery was a result of the permission granted by it for exploration in the mining lease area. "The contractor, Reliance Industries Ltd, has notified a new discovery of hydrocarbon in Block KG-DWN-98/3. The commercial potential of the said discovery is yet to be established."