Reliance, BP shut 7th well at India's KG-D6 gas block - source

NEW DELHI Fri Dec 14, 2012 6:48pm IST

Reliance Industries KG-D6's floating production storage and offloading (FPSO) vessel is seen off the Bay of Bengal in this undated handout photo. REUTERS/Reliance Industries/Handout

Reliance Industries KG-D6's floating production storage and offloading (FPSO) vessel is seen off the Bay of Bengal in this undated handout photo.

Credit: Reuters/Reliance Industries/Handout

Related Topics

Stocks

   

NEW DELHI (Reuters) - Reliance Industries (RELI.NS) and its partner BP (BP.L) have shut a seventh well in the D6 block off the country's east coast due to sand and water ingress, bringing down the number of producing wells to 11, a source with direct knowledge of the matter said.

The well at D1 and D3 gas fields was shut about a week ago, the source said on Friday.

Declining gas output from the D6 block in the Krishna Godavari basin has impacted expansion plans of several power companies, and spurred demand for costly liquefied natural gas imports.

Gas production from D6 has declined to about 23 million standard cubic metres a day (mmscmd), the source said.

A Reliance spokesman declined to comment on the matter.

Production at the block may average 22.6 mmscmd in the fiscal year starting April 2013 and is projected to decline to 20 mmscmd in 2014/15, only about a third of the 60 mmscmd it produced in 2010 and well below the planned peak capacity of 80 mmscmd.

Reliance may have to shut under-performing gas fields in 2015-16, oil secretary G.C. Chaturvedi said in October, while Morgan Stanley analysts have said the key gas producing fields in D6 could be exhausted in 5 years.

Reliance brought in the British oil and gas company last year, which paid $7.2 billion to invest in 23 oil and gas blocks with the Indian firm, hoping its offshore expertise would help arrest the decline in output.

The D6 block, operated by Reliance, was expected to contribute up to a quarter of the gas supply for Asia's third-largest economy.

Reliance and BP submitted a revised field development plan in September, cutting the gas reserves in the D6 block by about two-thirds to 3.4 trillion cubic feet, the oil ministry said last month.

Reliance had government approval to drill 50 wells and had drilled only 22 with 4 turning out to be dry, the source said.

Canadian company Niko Resources (NKO.TO) owns 10 percent interest in the block, while Reliance holds 60 percent and BP the rest. (Reporting by Nidhi Verma; Editing by Prateek Chatterjee and Gopakumar Warrier)

FILED UNDER:

Reuters Showcase

GDP Growth

GDP Growth

India revises up 2013/14 GDP growth to 6.9 percent.  Full Article 

Pharma Deal

Pharma Deal

Sun Pharmaceutical wins U.S. approval to buy Ranbaxy  Full Article 

Adani Restructuring

Adani Restructuring

Adani hives off power, ports businesses to boost growth.  Full Article 

Bank of Baroda

Bank of Baroda

Q3 net profit down 69 pct on higher provisions  Full Article 

Trading Fees

Trading Fees

BSE slashes fees in FX derivatives battle with NSE  Full Article 

SpiceJet Turnaround

SpiceJet Turnaround

SpiceJet board approves up to $243 mln share sale plan  Full Article 

Currency Market

Currency Market

RBI urges companies to hedge FX exposure  Full Article 

Banking Sector

Banking Sector

Banks say no room to cut lending rates, thwarting RBI easing  Full Article 

Reuters Poll

Reuters Poll

RBI seen holding rates steady on Tuesday, minority of analysts expect cut  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage