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India fears gas output at Reliance east coast fields becoming unviable

BY SAURABH CHATURVEDI

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NEW DELHI -- India said there is a fear of natural gas production becoming commercially unviable at Reliance key oil and gas producing fields in the eastern offshore Krishna Godavari basin if the output continues to decline.

Having the capacity to handle 120 MMscmd, and running it at 10 MMscmd, it almost like you' re declaring it commercially not viable, Oil Secretary G C Chaturvedi told reporters on the sidelines of a government conference when asked if there was a possibility of the main producing fields shutting down in future.

Once it is shut it will be very difficult to revive. In a gas field that' s the problem, he added.

Falling gas output at D6, considered India' s richest gas find so far, has dragged down the country' s overall gas production, forcing it to import costlier LNG.

Reliance, India' s largest listed company by market value, has slashed recoverable gas reserve estimates for two key producing fields in an eastern offshore block by 70%, citing production performance and a decline in pressure in the fields, the junior oil minister, R P N Singh said.

Reliance and its partners BP and Niko Resources are currently producing 26 MMscmd of natural gas from the three fields, Mr Chaturvedi said. In August, it reported an output of 29 MMscmd.

Output of natural gas is likely to total 43 Bcm, a decline of around 9.5% from 47.56 Bcm last year, Oil Minister Jaipal Reddy said earlier at the government event.

Reliance and partners are in fact trying to explore satellite fields further on how they can actually get more gas out of it and increase the overall output, Mr. Chaturvedi added.

A spokesman for Reliance Industries couldn' t be reached for comment.

Dow Jones Newswires

10/10/2012

 

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