Oil Gas outlook at KG D6 still gloomy consortium to pump more money

Last Updated : 23 June 2012 at 11:15 IST Source :Commodity Online

MUMBAI (Commodity Online): The outlook for natural gas reserves at Krishna Godavari ( KG D6) basin in which Reliance Industries Ltd (RIL) led consortium is planning to pump $4bn to develop satellite fields looks gloomy, according to indications given by Niko Resources Ltd, Canada, one of the consortium members.

?Proved plus probable reserves at D6 as at March 31, 2012 have reduced to 193 bcfe but it is important to recognize that coincident with the reduced reserves there is approximately a $700 million reduction in future capital,?according to Niko Resources. Oil major BP also has stakes in the KG D 6 and the two global oil giants were roped in to ensure technology and expertise for greater gas generation from the region.

Niko Resources further reported that:?Field performance at the D1/D3 field during 2011 demonstrated higher than expected pressure draw?downs and material balance estimates began to appreciably differ from in place gas volumes derived from geologic mapping. An assessment of reservoir performance concluded that, contrary to the previous geological model, the current D1/D3 producing wells did not appear to be receiving any contribution from outside the main channel areas. Two wells were drilled to determine the incidence of reservoir outside the main channel fairways. Reservoir analysis of these wells coupled with analysis of the field pressure behavior referred to above has resulted in the need to develop a revised geological model to better represent the field performance.

At the Annual General Meeting of Reliance Industries Ltd (RIL) in early June, Chairman Mukesh Ambani said that KG D block had already suppled more than 1.8 trillion cubic feet of natural gas and more than 19 mn barrels of crude ol to various consumers in the country. But the rapid fall in expected reserves causes concern and BP?s involvement in the project is expected to help unearth more resources in the basin, he added.

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