The output from Reliance Industries-operated D6 block, India's biggest gas-fields, dropped by almost 26 per cent in July from the peak 60 mscmd in end-2009. Output from the East Coast fields in July averaged 44 mscmd.
Reliance's partner in the block Niko Resources Ltd said the declines are expected to continue until workovers are completed and/or additional wells are tied-in.
The drop in output would mean that gas consuming industries benefiting from the fields will have to depend on the expensive imported gas. While the imported gas is available at $8.4/mBtu and $14/mBtu (excluding other levies and taxes), D6 gas is available at $4.2/mBtu (excluding the levies and taxes).
Recently, the Minister of Petroleum and Natural Gas, Mr S Jaipal Reddy, informed the Lok Sabha that the average gas output during April-June 2011 from the block was 48.60 mscmd against the production profile of 70.39 mscmd under the approved field development plan for the period.
India's gas output down
Declining D6 output has also led to a fall in the country's domestic gas output for the eighth straight month in July by 8.2 per cent to 4.14 billion cubic metre (4.5 bcm).
In order to enhance D6 production, the contractors have been advised by the Directorate General of Hydrocarbons to drill more wells. Reliance Industries has drilled two more wells in the block since July, sources said adding each well costs around $50-100 million. To check the drop in production, Reliance has roped in BP, to gain from the British firm's deepwater expertise.
Meanwhile, the country's crude oil output in July continued to rise for the 20th straight month by 1.4 per cent to 3.3 million tonne. This surge was because of increasing output from Cairn India operated Rajasthan oilfields.