RIL pegs remaining reserves at D1, D3 discoveries at 1.2 tcf

RIL said of the three tcf of proven reserves had already produced 1.8 tcf in the last four years

Reliance Industries Ltd (RIL) has pegged its remaining reserves in the D1 and D3 discoveries in the KG-D6 block at 1.2 trillion cubic feet (tcf). This was conveyed by the company to the management committee, which met on Tuesday to look into the fall in production in KG-D6.

A person privy to the development said the company suggested the names of four international companies — Ryder Scott; DeGolyer and MacNaughton (D&M); Gaffney, Cline & Associates (GCA); and Netherland Sewell & Associates — to look into whether it was hoarding gas at KG-D6 or it had encountered geological problems. Now, the proposal would be taken up by the Directorate General of Hydrocarbons (DGH).

At Tuesday’s meeting, RIL said of the three tcf of proven reserves, it had already produced 1.8 tcf in the last four years.

DGH had blamed RIL for the decline in output from the expected 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 the gas produced from its D1 and D3 discoveries if it is established the company artificially suppressed output in these fields. According to petroleum ministry officials, the finance ministry is yet to respond to the Cabinet note.

During the four years ending 2013-14, the total shortfall in production stands at 154 mscmd; the shortfall against the approved target was five mscmd in 2010-11, 28 mscmd in 2011-12, 55 mscmd in 2012-13 and 66 mscmd in 2013-14.

Last year, RIL had filed a revised field development plan, with lower capital expenditure and gas production. The company had scaled down its two-phased capital expenditure plan for the D1 & D3 fields from $8.836 billion proposed in 2006 to $5.928 billion.

In a letter to the petroleum secretary, RIL Executive Director P M S Prasad had lashed out at the regulator over its policies, especially those on gauging the viability of five discoveries — D4, D7, D8, D16 and D23, with reserves of 805 billion cubic feet worth $10 billion of imports (based on a price of $4.2 per million British thermal unit). DGH had recommended the government offer the area relinquished under the next round of the New Exploration Licensing Policy, citing at the current stage, relinquishment was appropriate according to the production-sharing contract.