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Corporate May 24, 2013

RIL-BP announce biggest ever gas discovery in KG-D6 block

New Delhi: Reliance Industries (RIL) today announced a huge natural gas discovery, possibly the biggest find ever, in the flagging eastern offshore KG-D6 block that will be key to arresting falling output.

RIL and its partner BP plc of UK encountered 155 metres of gas pay zone in the first exploration well drilled on the block in more than five years. The well was drilled two kilometres below the existing producing D1&D3 fields.

KG-D6 block. Reuters

KG-D6 block. Reuters

"The KGD6-MJ1 well was drilled in a water depth of 1,024 metres - and to a total depth of 4,509 metres (4.5 kilometres below seabed)," RIL-BP said in a statement.

The well was drilled to explore the prospectivity of a Mesozoic Synrift Clastic reservoir lying over 2,000 metres below the already producing reservoirs in the Dhirubhai-1 and 3 (D1&D3) gas fields.

"Formation evaluation indicates a gross gas and condensate column in the well of about 155 metres in the Mesozoic reservoirs," the statement said adding the well flowed 30.6 million standard cubic feet per day of gas during testing.

Though RIL-BP did not put any reserves to the discovery, the find may possibly be the largest single discovery in the country. The discovery, which was notified to the regulatory authorities this afternoon, has been named D-55.

Sources said the resource found may be significantly more than a pre-drill best case gross prospective resource of 819 billion cubic feet of gas and 56 million barrels of liquids for the well.

RIL-BP had drilled MJ-1 well in early March after the government permitted companies to drill exploration wells in areas where exploration period had long expired.

Dhirubhai-1 and 3 (D1&D3) gas fields, the largest among the 18 gas finds on KG-D6 block, have proved to be more difficult to produce than previously predicted.

D1&D3 reservoir has seen sharper-than-expected drop in pressure and water and sand ingress in production wells, leading to a drop in output.

The fields have seen output fall from 53-54 million cubic metre per day achieved in March, 2010 to about 11 mscmd this month. Together with less than 4 mscmd output from MA oilfield in the same block, KG-D6 is producing about 15 mscmd.

MJ-1 well will probe the 'Mesozoic synrift clastic reservoir' lying below the D1-D3 (Pliocene) Mining Lease area.

While RIL is the operator of KG-D6 block with 60 percent interest, UK's BP Plc holds 30 per cent and Niko has the remaining 10 percent.

Mike Daly, executive vice president exploration at BP, said the discovery follows "an 18 month drilling time-out and detailed geoscience work that has re-focused our India exploration program and delivered this early success".

Separately, the Ministry of Petroleum and Natural Gas said RIL-BP have notified Dhirubhai-55 (D-55) discovery in the KG-D6 block.

It said the find was "a result of the permission granted by the Ministry for exploration in the existing Mining Lease Area... The commercial potential of the said discovery is yet to be established".

The find, named 'D-55', has been notified to the government and the block oversight panel, the management committee.

"This discovery is expected to add to the hydrocarbon resources in the KG D6 block. Appraisal will now commence to better define the scale and quality of the field," the statement said.

Sources said RIL had more than a year back proposed to drill the MJ-1 well but permission for that came this year.

The approval came with the riders that the cost of such wells will not be allowed to be recovered unless it leads to a commercial oil and/or gas discovery.

"The discovery demonstrates the effective technical co-operation between the partners, allowing us to make a new and significant discovery within KG-D6," Daly said.

BP India head Sashi Mukundan, "This is a great example where BP, Reliance and the Government of India have worked together as a partnership to make this possible. We brought our process and discipline to explore this prospect in the deep water basin in India."

RIL executive director PMS Prasad said the partners will do an appraisal of the discovery in the next few months to evaluate the options for developing the find.

PTI


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