No production at KG-DWN-98/3 before 2008

Vol 8, PW 17 (17 Nov 04) Exploration & Production

In the above two stories we write about Reliances gala entry into gas production with all requisite approvals in place.

But a chance interaction with Reliance chairman Mukesh Ambani on 6th November in Delhi paints a different picture about the companys actual production plans. According to Ambani, Reliance will start commercial production of its deepwater gas in 2008-09.

This means that Reliance has pushed behind its production schedule by two years and will not start gas production in 2006-07 as disclosed in its development plan. Replying to a specific query by PETROWATCH, Ambani said: Production of gas from the KG basin block will start from 2008-09.

When this report tried to remind him that Reliance has already publicly announced that gas production will start from 2006-07, Ambani refused to accept there was any delay. It has been always like that, he insisted.

There is a difference between development and production. Weve always said that development will be in 2006-07 and production from 2008-09.

Not true. On 24th June this year, Ambani told shareholders: A development plan for producing 40m cm/d from the KG-D6 block by the year 2006-07 has been submitted to DGH.

Could it be that Ambani is not ready to admit what industry has long suspected That Reliance is struggling with the technical aspect of pumping gas out from the deepwater field Or that it is hesitating to invest billions of dollars in developing the block unless it has customers for at least 80% of its 40m cm/d of gas The 2006 target was ambitious and not in line with industry norms, a source tells us. Production of gas from a deepwater field is not easy.

Case studies form the Gulf of Mexico or West Africa show that deepwater discoveries come into production only after seven to eight years.

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