New Delhi: India's major business conglomerate Reliance Industries Ltd has sought approval from the Directorate General of Hydrocarbons to drill an exploratory well in the Dhirubhai-1 and 3 (D1&D3;) gas fields in the D6 block in the Krishna Godavari basin (KG D6) to study reservoir characteristic as the block's output continues to drop, media reports said, citing sources.
The energy explorer has written to the oil and gas regulator, seeking its nod to drill the exploratory well KGD6-MJ1 in the company's flagging D1&3 fields to probe the Mesozoic synrift clastic reservoir that is lying below the D1-D3 (Pliocene) Mining Lease area, the sources said.
Gas output from the KG-D6 field declined to 31.57 million metric standard cubic meters per day (mmscmd) during the week ended June 3, together with 6.01 mmscmd output in the MA oilfield in the same block. The output is expected to fall further to 20 mmscmd by fiscal 2014-15.
The company had last achieved target of 61.5 mmscmd in March 2010, and the production has been dropping since then.
The company had initially planned to raise the output from the field to 70 mmscmd in fiscal 2011-12, and 80 mmscmd by April this year, but failed to achieve the target, citing geological complexities.
As per the resolution of December 12, 2006, the company has to take approval from DGH for all future exploratory wells in D1 and D3 development area, the reports said.
Reliance Industries was to drill 22 wells by April, 2011, and 31 by April 2012. It has, however, drilled only 22 wells in the main D1 and D3 producing areas until now, of which 18 are producing gas, while others have been abandoned on account of holding uneconomical reserves.
The Ministry of Petroleum and Natural Gas recently restrained RIL from recovering $1.2 billion in costs from KG D6 block on failing to honor the production sharing contract (PSC) and meet the committed levels of gas output from the fields.
However, media reports Monday said citing a letter by company's counsel that there is no obligation in the contract to meet committed level of gas output, therefore government can not levy penalty on it.
Shares of Reliance Industries closed at Rs 737.25, up 2.58%, on the Bombay Stock Exchange Tuesday.