After much prodding and good two-hour deliberations, the management committee of Reliance Industries Ltd-operated D-6 block has approved the development plan of four satellite fields.
The investment plan for these fields is worth about $1.53 billion, give or take 15 per cent, sources said. The operator, Reliance, and its partners in the block have been saying the only solution available to increase output was for them to develop the satellite fields around the currently producing fields.
Initial estimates show that these satellite fields have gas reserves of around 10 mmscmd, sources added.
A management committee comprises representatives of the Petroleum Ministry, the Directorate-General of Hydrocarbons and the contractor. It oversees the operations of a block. Its approval is required for the operator to begin work in the fields.
At present, Reliance is producing 38-39 mmscmd of gas: 31 mmscmd from D-1 and D-3 fields and 7 mmscmd from MA fields. Out of the 18 wells in D-1 and D-3 fields, five have ceased to produce gas because of water loading and sand ingress in the wells. One in six oil or gas producing wells in the MA fields has ceased to produce due to water loading.
So far, five gas fields have been discovered in D-6 block. Of these, two (D-1 and D-3) are producing fields.
If all the satellite fields are developed, then, estimates show, 30 mmscmd of gas can be produced. Together with the producing fields (D-1 and D-3), the output from the block will be about 65 mmscmd.
However, the contractor has lost two months of the November-March work season, which would mean output from the block could be increased only slightly after 2014. The development of the area to bring it to production means mobilisation of resources — drilling vessel, geo-technical and seismic vessel — which can take anywhere between 10 days to a month depending on the location. Each vessel costs upwards of $10 million.
If the contractor is able to make up for lost time, it could still manage to increase output by 2014.