RIL-BP working to extend life of gas fields in KG-D6 block

BP, Europe's second-largest oil company, is working with Reliance Industries to extend the life of producing gas fields in the Bay of Bengal KG-D6 block.

BP, which bought a 30 per cent stake in RIL's 21 oil and gas blocks, including KG-D6, for $7.026 billion in 2011, is working with RIL to arrest the output decline in the fields.

"Following approval by the relevant authorities in 2012, a number of activities are being progressed to arrest the decline in production rates and to extend the life of the block KG-D6 producing fields.

“These include new work-over wells and the installation of additional compression and water handling capacity," BP said in its 2013 annual report.

RIL is the operator of the KG-D6 block with a 60 per cent stake while Niko Resources of Canada holds 10 per cent.

The KG-D6 fields, which began production in April 2009, hit a peak output of 69.43 mmscmd in March 2010 before water and sand ingress led to more than a third of the wells shutting down.

D1&D3, the largest of the 18 gas discoveries in the block, produced 66.35 mmscmd, while 3.07 mmscmd came from the MA field, the only oil discovery in the block.

Output dropped to about 11.7 mmscmd last year. Remedial steps helped reverse the declining trend and output rose to 13.6 mmscmd last month.

"In 2013 we made two significant gas and condensate discoveries in the Krishna-Godavari basin and the Cauvery basin (blocks KG-D6 and CYD5), a key milestone for our partnership with Reliance," BP said.

These resources have the potential to help meet India's growing demand for energy, increase gas supplies to the market from 2018 and improve the country's energy security, it said.

"Along with our exploration efforts to find new oil and gas, we aim to add value to our existing production in India by developing the gas we have already discovered," it said.

"We continue to grow our exploration position using our leading subsurface capabilities."

RIL-BP have surrendered most of the 21 blocks they partnered in 2011 as they did not hold commercially viable oil and gas.

They currently hold only six blocks.

In May, RIL and its partners announced a significant gas and condensate discovery in the KG-D6 block.

In August, RIL and BP announced a new gas condensate discovery in the deepwater CYD5 block in the Cauvery basin, off the east coast.

"In August the government approved the field development plan for the R-Series project in the KG-D6 block and has reviewed the appraisal plan for the KG-D6 discovery," it said.

BP said its board met for the first time in India in 2013 to gain an understanding of the opportunities and challenges in the country.

Board members visited the Kakinada onshore terminal which receives gas from the KG-D6 fields and discussed the geological complexities off the east coast with RIL representatives.