RIL plans to increase KG-D6 gas output

It closed 18 producing wells due to sand and water flooding, leading to an 85% output drop

Reliance Industries would repair a third of the wells shut at its main gas field in the eastern offshore KG-D6 block to boost output in the first quarter of 2014.

RIL closed half of the 18 producing wells at the Dhirubhai-1 and 3 gas fields in the KG-DWN-98/3, or KG-D6 block, due to sand and water flooding, leading to an 85 per cent output drop at 9.4 million standard cubic metres a day.     

The company is mobilising a drilling rig for the D1&D3 fields “to commence a three-well workover programme that is expected to increase the volumes from this field in the fourth quarter of the financial year,” said Niko Resources, a minority partner in the KG-D6 block.

Workover is the process of performing major maintenance or remedial treatment on an oil or gas well.     

Niko, which holds a 10 per cent interest in the KG-D6 block, said in its second-quarter earnings statement that the workovers will “contribute” to an increase in gas production. BP Plc of UK holds the remaining 30 per cent in KG-D6.     

RIL, the operator of the block with a 60 per cent stake, produced 12.26 mmscmd from the D1&D3 gas fields and the MA oil and gas field in the block in the Bay of Bengal in the week ended October 27, according to a status report of the Directorate General of Hydrocarbons (DGH).     

RIL had also shut two of the six wells at the MA field due to high water and sand ingress. The DGH report said the D1&D3 fields produced 9.39 mmscmd of gas, while the remainder came from the MA field.

The KG-D6 fields, which began gas production in April 2009, hit a peak output of 69.43 mmscmd in March 2010 before water and sand ingress shut down well after well.

D1&D3, the largest of the 18 gas discoveries in the KG-D6 block, produced 66.35 mmscmd, while 3.07 mmscmd was the output from the MA field, the only oil discovery on the block.

Besides the fall in output from D1&D3, gas production from the MA field, which had hit a peak of 6.78 mmscmd in January 2012, has dropped.

Niko said a development well, MA-8, has been spud at the MA field. "The well is expected to be on-stream in December."

The well and the workovers will help reverse the drop in output at KG-D6.

Sources said the workovers had been stuck for almost two years as the Oil Ministry and the DGH refused to approve their budgets. They were cleared only after Oil Minister M Veerappa Moily intervened.

The DGH report said 12 mmscmd of the last reported output at KG-D6 was sold to urea manufacturing plants and no sale was made to power plants. The remaining production was consumed by the pipeline that transports the KG-D6 gas, it said.