RIL to develop four satellite fields in India

Jan 23, 2012 12:00 AM

After a long wait for government approval, Reliance Industries Ltd. (RIL) begins to work on development of four satellite fields, D-2, D-6, D-19 and D-22, in India’s largest gas field, block D6 in the Krishna-Godavari basin, or KG-D6.
In an investor presentation, RIL said it would start engineering surveys soon. The approved capital expenditure of $ 1.529 bn could be revised upwards or downwards by 10 %, depending on the actual costs.

“We have a four-month weather window and we plan to take advantage of that. We are beginning work on the entire geophysical, geotechnical and geohazard studies. But, since the plan was made in 2009 (the approval came only this month), we have to look at the numbers again and review if required,” said a source.
“In this period of waiting (for the approval), we now have data of over two years production of D1 and D3. We have to revalidate the assumptions we had made, based on the data we had collected. During this process, if at all there is any change required, we will do so,” the source added.

The four fields are said to be able to produce 10 mm cm of gas per day by 2016.
RIL posted its third-quarter numbers earlier and said its oil and gas exploration business posted a 32 % decline in revenue, on account of lower production at D6. RIL is producing 40 mm cmpd, 33 % lower than the 60 mm cmpd it was producing a year earlier. In November, RIL had told the regulatory authorities that it wishes to take advantage of the weather window.

“You may or may not get the resources in place to complete the work. There are certain items for which there are only a handful of vendors worldwide. We have to speak to them and find their costs and product availability, and then you never know how long it will take to get the equipment."
"All this has to be factored in,” the source added.

BP and Niko Resources are also partners in the fields.
Niko holds 10 % and BP farmed in last year for 30 % stake in RIL’s 23 blocks. RIL holds 60 % stake.

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