Conflicting D6 gas reserves give ministry headache

Vol 15, PW 26 (12 Jul 12) Exploration & Production

Reliance, BP and Niko should talk more often! Overburdened oil ministry officials are fuming at conflicting D6 gas reserves estimates submitted by the three partners.

Such discrepancies, they argue, make it difficult to get a clear idea of the overall gas supply outlook. Expect the ministry to officially direct the partners to reconcile their gas estimates at a Management Committee meeting later this month.

Still unclear is how long the partners will take to respond. No one can argue the ministry has a point.

If you believe the D6 block Field Development Plan (FDP), approved in 2006, the D1 and D3 fields hold in-place gas reserves of 12.59-tcf and recoverable gas reserves of 10.03-tcf. For the MA field in-place gas reserves are 0.941-tcf and recoverable gas reserves are 0.681-tcf.

But on April 23 this year Reliance told the DGH that proved D1 and D3 reserves are 1.516-tcf. Reliance also downgraded ultimate reserves in the block’s ‘main channel’ or core area from 4.012-tcf to 2.985-tcf, but failed to provide figures for other ‘inter-channel’ or ‘laminated sands’ areas.

Compare Reliance’s calculations to BP’s 2011 annual report released in March, which puts proved D6 reserves at 0.31-tcf, or 1.4-tcf of in-place reserves. Inexplicably, DGH officials have yet to receive BP’s estimates officially.

Adding to the confusion, Niko sent an email to the DGH on June 21 saying proved and probable reserves are 0.193-tcf, translating to 1.93-tcf of in-place reserves. “Niko hired third party consultant (Houston-based) Ryder Scott for its evaluation,” says an industry source.

“Ryder reported an 80% reduction in balance reserves.” Reliance and Niko figures omit reserves outside the block’s core area, earlier calculated as 6-tcf in the FDP.