Reliance to complete 19 Sohagpur CBM wells
Reliance aims to complete 19 pending wells at its Sohagpur East and West CBM blocks in Madhya Pradesh by March 31 (2025).
These 19 are left over from a 40-well multilateral drilling programme, which Reliance is implementing to increase Sohagpur CBM production. "Of the 40 planned wells, we've completed 21," says a company source.
"The remaining 19 will be completed by the end of the fiscal (2024-25)." Of the 21 completed wells, Reliance is ramping up production at 20 of them.
"Our sole focus in Sohagpur is to increase gas production," we hear. Once the 40-well programme is completed, Reliance expects 500,000 cm/d incremental production.
Each multilateral well has more than one well branching out from the main wellbore, targeting different formation layers. "Sohagpur is witnessing a turnaround," we hear.
"Gas production has risen in April, May and June (2024) with current production at 790,000 cm/d with a substantial contribution from the new wells drilled." In its 2024 annual report, Reliance said the average gas production from Sohagpur in 2023-24 was 640,000 cm/d from 300 producing wells.
In 2021-22 and 2022-23, the average production was 730,000 cm/d compared to the 1m cm/d production in 2019-2020 and 2020-21. Reliance expects peak production of 3.5m cm/d from the two Sohagpur blocks.
However, the average price realisation has fallen. "In April, May and June (2024), the average price for CBM gas was $11.59/mmbtu compared to $14.15/mmbtu in the same three-month period last year (2023)," we hear.
In February 2024, Reliance secured bids at $11/mmbtu to sell 900,000 cm/d. GAIL won 630,000 cm/d, Indraprastha Gas secured 140,000 cm/d, Reliance Gas Pipelines took 20,000 cm/d, Reliance-BP joint venture India Gas Solutions took 60,000 cm/d and Ahmedabad-based aggregator Enertech secured 50,000 cm/d.
In another auction in March 2022, Reliance invited bids based on a premium of 13.2% to Brent, trading at above $115/barrel. CBM is sold in line with auction guidelines issued by the DGH after the Cabinet Committee on Economic Affairs approved pricing and marketing freedom for producers on March 15 (2017).