Natural gas output from Reliance Industries Ltd-operated Krishna Godavari Basin D6 block is expected to once again touch 60 million standard cubic metre per day (mscmd) from April.

Speaking to reporters at the sidelines of the ninth Petro India summit, Mr S.K. Srivastava, Director-General, Directorate General of Hydrocarbons (DGH), said, “Reliance Industries is currently producing 52-53 mscmd of gas from 18 wells in the D6 block. By April, it will be producing from 22 wells.”

Production from the block had declined during July-October from 60 mscmd to the current levels. Commenting on the drop in production from the fields, Mr Srivastava said, “It is natural for fluctuation in production out of oil and gas wells. These kind of things keep happening.”

Gas production from the D6 block averaged about 60 mscmd for the April-June period last year, but fell to 58 mscmd in the July-September period and to 54 mscmd during October. The output decline from the fields was a cause of concern, as it accounts for a significant portion of Reliance's earnings and India's gas production. More than 7 per cent of Reliance's revenue in the quarter ended September 30 was from oil and gas production, mainly from the D6 block.

The deep-water block in the East Coast is expected to reach its peak production target of 80 mscmd per day by 2012-13.

Higher Energy Prices

Meanwhile, inaugurating the summit, Mr B.K. Chaturvedi, Member-Planning Commission, said that the country needs to get used to higher prices for natural gas.

“The country is accustomed to the gas price of $3 per mmbtu and power prices of Rs 1.5-2.5 per unit and that prices cannot remain at that level for long. Energy policy in the country should evolve to absorb gas prices of about $8-10 per mmbtu which is the price level for shale gas and LNG,” said Mr Chaturvedi.

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