DD-KG2 home earlier than expected

Vol 16, PW 3 (23 Aug 12) News in Brief

Reliance looks as if it has changed its mind about delaying the return of drillship DD-KG2 to Indian waters.

Contrary to earlier reports, contractors tell us DD-KG2 could be at KG-D6 as early as November this year to drill a single exploration well. Reliance reportedly told the ministry last week it will bear the $100m cost of exploration well MJ1 and claim cost recovery only if there’s a commercial discovery.

Analysts say Reliance’s pledge will placate ministry fears it has “given up” on E&P in India amid reports it is delaying all new drilling until the $4.2/mmbtu D6 gas price is revised upwards post-2014. Contractors welcome Reliance’s decision.

“I hope this marks the resumption of a wider drilling programme,” says one. “Reliance wouldn’t mobilise for just a single well.

” In January Reliance and partner BP secured approval for a 15-well development programme at KG-D6, where production has dropped to 29m cm/d. DD-KG2 is currently offshore Malaysia drilling for Petronas.