In a major relief to Mukesh Ambani-owned Reliance Industries Limited (RIL), the Management Committee (MC) of the Petroleum and Natural Gas Ministry for the KG D6 block granted approval to the company's $1.529-billion investment plan for developing four satellite fields in the flagging KG-D6 block.
The KG-D6 block oversight committee, which includes officials from the Petroleum Ministry and Directorate General of Hydrocarbons (DGH), met here on Tuesday and approved the proposal. The MC go-ahead, which is the final approval an operator needs before beginning work, has put a cap on the cost of developing the four fields that surround the currently producing Dhirubhai-1 and 3 (D-1 & D-3) fields in the KG-D6 block stating the cost cannot vary by more than 15 per cent.
RIL agreed to cap spending on the four fields at $1.529 billion, plus or minus 15 per cent. The company has so far made 18 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 million metric standard cubic metres a day (mmscmd), in March, 2010, to 32.94 mmscmd this month.
Together with 6.86 mmscmd of associated gas produced from the MA oilfield in the same area, total production from the block amounts to 39.80 mmscmd. The company had, in July, 2008, submitted an FDP to exploit reserves of 1,708 billion cubic feet (bcf) in nine satellite gas discoveries (D-2, D-4, D-6, D-7, D-8, D-16, D-19, D-22 and D-23) in the D6 block at an estimated capex of $5.6 billion.
It later submitted an optimised development plan for four of the satellite gas fields (D-2, D-6, D-19 and D-22) at the end of 2009.
