RIL ramps up crude oil capacity at KG basin

Production from the field estimated to save India an annual foreign exchange outflow of $20 billion.

Mukesh Ambani-controlled Reliance Industries (RIL) has raised its crude oil production capacity from the D6 block of the Krishna-Godavari (KG) basin, the largest find in the country, to a maximum level of 40,000 barrels per day (bpd) from the earlier 18,000 bpd, according to a company executive.

The company has drilled two more wells and resumed commercial production on Sunday night, after 35 days of a planned shutdown.

“With the addition of two wells, the capacity has technically risen to the maximum level. But the production will increase to 40,000 bpd only in a month’s time, depending on how the resource reacts to the capacity enhancement. Earlier, we had two production wells and one injection well at the location. After the capacity ramp-up, we began with 20,000 bpd production on Sunday,” said the executive.

The entire crude produce would be sold to Chennai Petroleum Corporation, a subsidiary of Indian Oil Corporation (IOC), at the existing international crude price, added the executive. An RIL spokesperson declined to comment.

To raise the capacity, the company had temporarily stopped crude oil production from its east coast block from March 22. Before the shutdown, RIL was producing about 18,000 bpd from two wells.

The company began oil production from the KG block in mid-September. It was producing about 10,000 bpd of oil from two wells before it shut its floating production, storage and offloading (FPSO) system for nearly three months from December, following equipment failure.

RIL owns 90 per cent of the D6 block and Canada’s Niko Resources has the rest. The field produces sweet crude of 42 degree API (the universal grading system developed by the American Petroleum Institute), which can be processed by any refinery in the country.

RIL recently started gas production from here and began supply to fertiliser companies. The current gas production is around 12 million standard cubic meters a day (mscmd). RIL expects to produce 40 mscmd gas by the end of June and raise it to 80 mscmd by the end of the year.

With the enhancement of crude and gas production, RIL’s KG D6 would account for 40 per cent of the country’s current indigenous hydrocarbon production. It is estimated that hydrocarbon production from the field will save India an annual foreign exchange outflow of $20 billion.