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Friday, September 21, 2018

Reliance shuts down Krishna Godavari oilfield

Reliance Industries (RIL) has permanently shut down its only oilfield (MA field) in the Krishna Godavari (KG)-D6 block after production declined to nil, the company said in a filing with the stock exchanges today.
“This is to inform that MA (D26) field in Block KG-DWN-98/3 (KGD6), which is being operated by RIL as an operator of the joint venture consisting of RIL (60%), BP (30%) and NIKO (10%), has ceased production on 17th September, 2018. Post-cessation activities related to safe shutdown of the field are underway,” said RIL in a statement.

Production from the field had been in natural decline and facing continuous challenges due to high water production and sand ingress. The field has cumulatively produced about 0.53 trillion cubic feet (TCF) of gas and 31.4 million barrels of oil and condensate and had no remaining reserves.

The fields were predicted to last a minimum 15 years but have been extinguished in less than a decade. In April-June 2018-19, the MA field contributed less than 0.1% in terms of revenue at the consolidated level, RIL said.

The Dhirubhai-26 (D26), oil, gas and condensate deepwater discovery was made in 2006. The discovery was developed and put on production in September 2008. This was
India’s first deepwater development (water depth up to 1,250 meters).

“Relevant governmental agencies have already been informed,” RIL said.

RIL had made 19 oil and gas discoveries in the Krishna Godavari basin, of which D26 or MA — the only oil discovery — was the first to begin production in September 2008. The Dhirubhai-1 and 3 (D1 and D3) fields went onstream in April 2009.

The field had in its first month of production produced 39,976 tonnes of crude oil, peaking at 1,08,418 tonnes in May 2010. Output, however, has been declining since and it produced 0.14 million barrels in the April-June quarter this year.

The field, however, peaked at 8.4 million standard cubic meter per day in August 2010 before sand and water ingress forced shutting down of well after well. The D1 and D3 fields, too, had a peak that year in March when these touched an output of 61.4 mmscmd. Output thereafter has only declined.

The KG-D6 output in April-June averaged at 4.7 mmscmd. This was made up of production from the D1 and D3 fields and the MA field.

RIL along with its partner BP Plc is now developing three sets of discoveries -- R-Cluster, Satellite Cluster and MJ fields -- in the KG-D6 block at a cost of Rs 40,000 crore. These fields together will bring 30-35 mmscmd of peak output. Initial gas will flow from 2020

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