RIL’s KG-D6 Development Plans Get Oil Ministry Approval; Greater Gas Output Anticipated

By Sacchitjogi07 

The Ground Report India- After months of persistent efforts, Mukesh Ambani led Reliance Industries Limited (RIL) had been granted official sanction from the oil ministry for its $1.529 billion investment plan for developing four satellite fields in the energy rich KG-D6 block, located off the east coast of Andhra Pradesh. This approval comes at an opportune time when the whether conditions are favourable for prolific explorations and survey plans on sea-bed sites, turning the odds even for RIL and its partners BP Plc and Niko Resources as they work towards realising an ambitious energy development plan.

Reliance Industries had previously submitted a proposal to the KG-D6 oversight committee which cited development of four additional satellite fields in the in KG-D6 block, namely Dhirubhai-2, 6, 19 and 22 (D-2, D-6, D-19 and D-22) fields. These fields are located around the currently functional and gas producing fields - D-1 and D-3. As per pre-examination studies, it has been estimated that these prospective satellite fields have the potential to generate 10 million cubic meters of gas output per day by the year 2016. Such production mark-up is guaranteed to shore up the output from the KG block, which has seen a paltry growth graph in the last few months.

Initially, RIL had requested oil ministry’s approval for prolific development of nine satellite gas discoveries in an FDP submitted in 2008, including D-2, D-4, D-6, D-7, D-8, D-16, D-19, D-22 and D-23 fields, with an estimated capex of $5.6 billion and reserves of 1,708 billion cubic feet (bcf). A more efficient development plan for four of these satellite gas fields was later submitted in 2009. However, on direction of the KG-D6 oversight committee, RIL revised the proposal according to new rates and current prices, capping spending on the four satellite fields to about $1.529 billion, plus or minus 15 percent. This has now been favorably agreed upon by the management committee meeting held yesterday.

With the official sanction confirmed, RIL and its partners are gearing up to commission sea-bed surveys in the Bay of Bengal site aside from starting pre-engineering works as per proposed plan. Industry analysts suggest that this bid to develop additional acreage around KG D6 will prove a beneficial proposition not just for the operating partners, but also for the government. If speculative output count is to realize, the government stands to ward off some its energy security concerns which have been brewing for the last couple of months.