Drilling less wells led to output drop

A fall in Reliance Industries Ltd’s gas output at its KG D6 block is due to it drilling fewer number of wells than promised and stoppage of production at six wells, the government said today. “The Directorate General of Hydrocarbons (DGH) has reported that the reasons for the decline in gas production from D1 and D3 is due to drilling of only 22 wells, as against the 31 producing wells approved for drilling up to March, 2012 as per the field development plan,” Petroleum minister Jaipal Reddy told the Lok Sabha.

Of the 22 wells drilled, four wells have not been put on production, he said in a written reply. The DGH has not agreed with RIL’s argument that geological complexities prevented it from drilling more wells.

The DGH, the technical advisor to the Oil Ministry, has asked RIL to “comply with the approved FDP by drilling more number of gas-producing wells in the D1 and D3 gas fields and achieve the FDP-approved gas production profile,” the minister said.

The company, however, does not want to drill more wells at the moment since it feels this will not help in production but will only increase the cost. It says that with a new partner, British Petroleum, on board, they are together engaged in understanding the reservoir behaviour through data collected over the last few months. They are expected to come out with an integrated plan in order to have an optimum solution.

The output from KG-D6 is short of the 70.39 mscmd-level (61.88 mscmd from D1&D3 and 8.5 mscmd from the MA field) envisaged by now as per the FDP approved in 2006. D1 and D3 output was to touch a peak of 80 mscmd by March, 2012.

“The contractor (RIL) has neither drilled the remaining nine producing wells nor taken any alternative action such as revisions of the FDP for approval of the management committee as per the provisions of the Production Sharing Contract,” the minister said.

The management committee is an oversight body comprising representatives of the contractor, the DGH and Oil Ministry. “In addition, five out of total 18 gas producing wells in D1&D3 fields have ceased to produce gas due to water-loading/ sand ingress in the wells,” Reddy added. “One oil/gas producing well in the MA field out of six oil/gas producing wells has ceased to produce oil/gas due to water-loading in the well.”