Reliance halts CBM drilling

Vol 15, PW 25 (28 Jun 12) News in Brief

Reliance is refusing to drill more development wells at its 495-sq km Sohagpur East and 500-sq km Sohagpur West CBM blocks until the oil ministry approves its $14/mmbtu gas price.

PETROWATCH learns Reliance released John Energy’s 750-hp rig from the CBM-I blocks in Madhya Pradesh’s Shahdol district in March after completing a contract for 47 wells. It is currently working over some wells but doesn’t want to spend more money on drilling unless its gas price is approved.

Under the development plan, which the DGH approved in 2007, Reliance proposed to drill 240 wells across both blocks. Till date it only has 60 wells ready to produce about 10,000 cm/d of gas each.

Reliance signed PSCs for the Sohagpur blocks on July 26, 2006 and wanted to begin commercial gas production from 2009, a target it missed. It hired John in November 2010 for a 29-well drilling contract, extended by 18 wells last November.

Together, Sohagpur East and West hold 3.65-tcf of gas.