Govt to take stock of RIL D6 output next week

Unconvinced with the reasons stated by Reliance Industries Ltd for a steep decline in gas production from KG-D6 field, the government has called a meeting of the management committee of the block next week. Gas output from the field is hovering around 50 million standard cubic metres per day (mscmd), down 20 per cent compared to April 2010.

A meeting of the Management Committee, that oversees the operations of the KG-D6 fields, has been called next week to “ascertain reasons” for RIL not meeting its drilling commitment and the drop in production, petroleum secretary S Sundareshan said.

“A formal meeting has been called next week in which representatives of the oil ministry, Directorate General of Hydrocarbons and the contractor (Reliance) will be present,” he said. “After ascertaining the reasons, we will take appropriate measures.”

“These are fields which have come into production after monumental effort... We do not come to abrupt judgements on these matters,” he said when asked if the government was contemplating levying any penalty. “It is difficult at this juncture to comment on why production has fallen (and) it is too premature to talk of action,” he said.

RIL ASKED TO DIVERT ALL GAS TO PRIORITY SECTORS
Sundareshan said RIL has been asked to stop supply of gas to non-priority customers like Essar Steel with immediate effect. He said the government had initially allocated 40 mscmd of gas only to fertiliser, power, LPG extraction units and city gas distribution firms. When output went up, additional users in steel, refineries and petrochemical sector were added.

And now when the output has fallen to around 50 mscmd, it is natural for the government to go back to allocation made to the priority sector, he added.

Upstream oil regulator Directorate General of Hydrocarbons (DGH) has already sent a fact finding mission to KG-D6 fields to ascertain reasons for the decline in production. The three-member team lead by Gautam Sinha, Head of Production at DGH, will review well-wise production and reservoir performance of KG-D6 fields.

The government gas allocation to critical sectors like power, fertilizer, steel, etc has gone haywire due to the declining gas output at the country’s biggest oil producing field. RIL has so far signed up customers for 60.76 mscmd of gas while production is around 50 mscmd, including the MA field.

With fall in production, RIL has cut supplies to all the customers on a pro-rata basis. But the government has directed RIL to divert gas from sectors like steel and petrochemicals to fertilizer and power in accordance with union gas utilization policy.