RIL to start production at 3 new blocks by mid-2020

To reverse the decline in production of natural gas fields in KG-D6 block in Bay of Bengal, Reliance Industries (RIL) said it is likely to start production at the three new sets of discoveries in the block by mid-2020.

The production decline in the blocks over the years has brought it to 'late life stage' though it has not plummeted to an all-time low.

In an investor presentation post the announcement of its June quarter results, the company said that Dhirubhai-1 and 3, which once were the country's highest gas producing fields, are now "in a late stage'. The depleting output has been affected by low pressure and water ingress related challenges. As per the company, the fields produced an average of 1.76 million standard cubic meters per day of gas during the April-June period.

The company, in its presentation, said it is now developing three sets of discoveries, viz; R-Cluster, Satellite Cluster and MJ fields in KG-D6 block which will together produce 30-35 mmscmd of peak output.

RIL has so far made 19 oil and gas discoveries in the KG basin. The KG-D6 is said to have hit a peak of 69.43 mmscmd in March 2010, before water and sand ingress affected the wells.

MA, which is the only oil discovery in the block began production in September 2008 but ceased to produce in September last year. While D1 and D3 fields, which went into production in April 2009, are now said to be in their last stage.

The company said that the R-Cluster development (is) on track for the first gas in mid-2020 while the satellite cluster is on track for first gas in Mid-2021 (and) MJ Development on track for production in mid-2022. Meanwhile, all six wells on R-Cluster have been completed and now the second phase of offshore installation activities are planned on the field in the third quarter of FY20, for Satellite fields and MJ field all contracts have been awarded.

RIL is the operator of the block with 60% interest while British energy giant BP holds a 30% stake. Niko Resources of Canada has the remaining 10%, but it has defaulted on payments triggering the process of assignment of its interest to RIL and BP.

BP and Reliance Industries will invest $5 billion in order to bring into production three sets of natural gas fields in the Krishna Godavari basin block in the Bay of Bengal by 2022.

BP's chief executive (upstream) Bernard Looney said the partners are also discussing the development of natural gas found in Mahanadi basin, off the Odisha coast.

According to Looney, India is expected to overtake China as the largest growth market for energy by mid-2020, as its energy demand is set to increase two-and-a-half times until 2040.