RIL-BP to invest $1.5 bn to develop satellite gas fields

Reliance Industries and its partner BP Plc of the UK will invest about USD 1.5 billion to bring to production six satellite gas discoveries in the flagging KG-D6 block by 2022.

RIL-BP combine yesterday submitted to the Directorate General of Hydrocarbons (DGH) a field development plan for what are known as satellite and other satellite fields, sources with direct knowledge of development said.

They plan to develop four deepsea satellite gas finds, named D-2, 6, 19 and 22, together with two other nearby finds, D-29 and D30, in the Krishna Godavari basin block.

In all, 5-6 gas producing wells will be drilled and tied to production facilities, they said adding peak output may be in the range of 10 to 12 million standard cubic meters per day.

The four satellites and the two other satellite finds (D29 and D30), R-Series and MJ gas discoveries, are the ones on which RIL and BP had in mid-June this year announced investing Rs 40,000 crore to reserve the flagging production from KG-D6 block.

Sources said development of the six satellite finds are being taken up together while D-34 or R-Series and D-55 (MJ) would have separate development plans.

The government had in 2012 approved a USD 1.529 billion plan to produce 10.36 million standard cubic meters per day of gas from four satellite fields of block KG-DWN-98/3 (KG D6) by 2016-17.

The four fields have 617 billion cubic feet of reserves and can produce gas for eight years.

However, the companies did not begin the investment citing uncertainty over gas pricing.

Now that the government has allowed a higher gas price of USD 6.3 per million British thermal unit for yet-to-be- developed gas finds in difficult areas like the deepsea, RIL and BP have decided to take up their development.

This rate is comparable with USD 2.89 per mmBtu for currently producing fields.

Sources said these four finds are now been clubbed together with D29 and D30 discoveries, which had been held up over conformity tests.

RIL-BP combine does not plan to alter the USD 3.18 billion investment plan for D-34 or R-Series gas field in the same block, which was approved in August 2013.

About 12.9 mmscmd of gas for 13 years can be produced from from D-34 discovery, which is estimated to hold recoverable reserves of 1.4 trillion cubic feet.

A separate development plan for the MJ find would be submitted by mid-2018, they said.

RIL has so far made 19 gas discoveries in the KG D6 block. Of these, D 1 and D 3 the largest among the lot were brought into production from April, 2009, but output has fallen sharply from 54 mmscmd in March, 2010, to 3-4 mmscmd.

MJ is the only other field that was put to production.

Together, the three fields today produce 6.4 mmscmd.

Other discoveries have either been surrendered or taken away by the government for not meeting timelines for beginning production.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)