Natural decline in output from some of the natural gas producing fields coupled with continued fall in output from the country’s largest fields saw the domestic production fall for the 25th straight month in December.
Further lower offtake by consumers (industrial) due to various reasons aided the decline in gas production which fell 14.9 per cent in December year-on-year with output from the offshore fields including Reliance Industries operated D6 block dipping 17.5 per cent.
Natural decline in output is because of ageing fields. Drop in D6 block output is because seven producing wells in D1, D3 fields and two in MA fields have ceased to flow gas due to water/sand ingress.
KG-D6 block is currently producing 20.4 mmscmd (16.4 mmscmd from D1, D3 fields and 4 mmscmd from MA fields) after hitting a peak of 60 mmscmd in end-2009. This output is unlikely to increase before 2015-16 when Reliance and its partners in the block – BP and Niko Resources – are targeting to bring the satellite discoveries on stream.
Besides, the contractors of D6 block are also optimistic about the MJ1 discovery in one part of the producing gas fields (D1 and D3). They feel that MJ1 could have significant gas reserves. The contractors are looking at end February to start drilling in MJ1.
In December, 157-158 mmscmd of gas has been transported in the country by the transmission companies including GAIL (India). Of this 102-103 mmscmd is domestic gas and 55-56 mmscmd imported. According to industry, during last couple of months, 5-7 mmscmd of additional LNG has been flowed into the network.
According to the data released by the Petroleum & Natural Gas Ministry, for the April-December period of the current fiscal the natural gas output fell 13.3 per cent against the same period pervious year, output from the offshore fields have dropped 16 per cent.
Meanwhile, crude oil production in December was up 1 per cent year-on-year. This was because output from the onshore fields including Cairn India’s Rajasthan block was up 8.3 per cent annually in December.
To meet the growing petroleum product demand and no significant increase in indigenous output, the domestic refiners were compelled to import more crude oil in December year-on-year. The refiners (18 public sector and two private sector) imported 15.133 million tonne of oil (13.933 mt in December 2011). Reliance Industries does not share planned targets and production data for its export orient refinery in Jamnagar.
According to Petroleum Planning & Analysis Cell (PPAC) data, the petroleum product demand in December was up at 13.409 mt from 13.018 mt last December. To cater to the growing petroleum product demand, the refiners turned 5 per cent more crude oil into fuel during the month.
According to PPAC, the consumption estimates represent the market demand and is aggregate of sales by oil companies in the domestic market and consumption through direct imports by private parties. While the data for company sales were actual that of private direct imports are estimated, it said.