Reliance KG-D6 gas output likely to improve this fiscal: Report

Production from the Reliance Industries (RIL) consortium-operated KG-D6 gas fields in the eastern offshore is likely to improve to 15 million units by the second half of the current fiscal as the operator completes work-overs, financial services company UBS said.

"KG-D6 gas production to improve further to 15 mmscmd (million metric standard cubic meters per day) with work-over at D1-D3 complete by 2HFY15," UBS said Tuesday in a research note.

Gas production from RIL's KG basin block has fallen to around 12 mmscmd after reaching a 2010 peak of 61 mmscmd, and the company is carrying out work-over on main Dhirubhai-1 and 3 gas fields.

"We think an increase in gas price hike is likely soon, and the government focus to encourage domestic production and problems with KG-D6 should be resolved shortly and gas production visibility should improve," the note added.

RIL is already in arbitration with the government on proposed cost recovery by the latter for the consortium not being able to meet the committed output from the fields.

There is a second arbitration ongoing on the delay in implementation by the government of the new gas price guidelines notified by the previous government in January.