Mukesh Ambani’s Reliance Industries Limited (RIL) and UK’s British Petroleum (BP) have saved the KGD6 gas field from a possible shutdown. This comes after the two companies got long-delayed approvals to take remedial action to stop water ingress from choking wells. RIL and BP added the first production well in the basin in more than four years after Oil Minister VeerappaMoily approved of measures to rectify the situation. These were left pending from the Ministry’s side for the past 18 months. As a result, output has been ramped up by over 15% to 13.7 million standard cubic metres per day.
These wells which are expected to contribute up to 2 Million Standard Cubic Metre per Day (mmscmd) to the overall output from the KGD6 basin. The water plugging adding smaller volumes too could have come back around a year ago and saved the power plants from being completely averted of supplies. BP India head SashiMukundan said the two partners are currently attempting to cut off water ingress into three wells on the main Dhirubhai-1 and 3 (D1&D3) gas fields and if successful will do the same on a similar number of wells in 2015. In between, they will also install a compressor at the onshore terminal to pull the gas up from the wells that are over a kilometre below the sea.
RIL and BP have also added the MA-8 well on January 2nd and plan to drill a branch well later this year. A company source was quoted as saying, “this is part of the next phase of producing the gas in the MA field after the oil has been produced”. A similar strategic approach is on track for D1 and D3 wells. The official added, “We are currently doing water shut-off (WSO) job on three wells on D1&D3 gas fields before we install a compressor in first half of 2015.” The KG-D6 wells, the world biggest gas discovery in 2002 hit a huge roadblock after water and sand ingress. The situation garnered immense support from BP’s technical staff from around the world. This was after BP has bought a 30% stake in KGD6 and 20 other blocks from RIL for US$ 7.2 billion.
After all these problems were resolved, it looked like only a matter of time before these actions received government approval. However, they were blocked by both the Directorate General of Hydrocarbons and the Oil Ministry over a dispute about CAG auditing RIL accounts. This caused more oil wells to shut down. 10 out of the 18 wells at D1&D3 had shut down, and two of the six wells on MA had too due to water and sand seepage – it looked at this point that it would signal a complete shutdown of the project with just 10% of the gas flowing in a design capacity of 80 mmscmd. Industry analysts maintain that it would have been very hard to avert a shutdown even though RIL had the might of BP on their side. It’s a testament to what RIL and BP have achieved together that this thankfully was avoided.