International expert may look into KG-D6 output fall: Moily

RIL sasy out of total 3 trillion cubic feet of proven reserves, it has already produced 1.8 tcf in last four years

Petroleum Minister M Veerappa Moily has said the government may appoint an international consultant to look into the fall in gas production in KG-D6.

At a management committee meeting early this week, Reliance Industries Ltd (RIL) had suggested the names of four international reservoir consultants---Ryder Scott, DeGolyer and MacNaughton (D&M), Gaffney, Cline & Associates (GCA) and Netherland Sewell & Associates---to look into whether gas was being hoarded at KG-D6.

The Directorate General of Hydrocarbons (DGH) would take a decision on the matter.

“An international expert would be looking into this,” Moily said on the sidelines of an Indian Chamber of Commerce event here. On the decline in production at KG-D6, he said, “The government will not deviate from contractual provisions and the production-sharing contract agreement because output from KG-D6 has declined. People say KG-D6 is sinking. But India will not sink with that. KG-D6 is an isolated case.”

Of the total three trillion cubic feet (tcf) of proven reserves, RIL had already produced 1.8 in the last four years, the company told the management committee for the D1 and D3 blocks this week. Last year, RIL had filed a revised field development plan, with lower capital expenditure and gas production. It had also scaled down its two-phase capex plan for the D1 & D3 fields from $8.836 billion (proposed in 2006) to $5.928 billion.

DGH had blamed RIL for the fall in production from an estimated 80 million standard cubic metres a day (mscmd) to about 10 mscmd now. The petroleum ministry has already moved a Cabinet note that may deny RIL a higher price for gas produced from its D1 and D3 discoveries, in case it is established the company had artificially suppressed output at these fields.

The total shortfall in production during the four years ended 2013-14 was 154 mscmd. Against the approved targets, the shortfall was 5 mscmd in 2010-11, 28 mscmd in 2011-12, 55 mscmd in 2012-13 and 66 mscmd in 2013-14.