Reliance in Phase-II at D6 without relinquishing 25%

Vol 10, PW 1 (04 May 06) Exploration & Production

Reliance has begun civil construction work to set up land-based facilities to receive, separate, treat and despatch the gas from D6 through a planned cross-country pipeline.

Work began about a month ago to dredge the river to lay the pipelines coming from offshore to land. Theoretically, D6 can produce 80m cm/d gas.

But Reliance does not want to repeat ONGCs mistake of flogging the Mumbai High field, we hear. Production will be initially restricted to 40m cm/d.

Plans to increase production are under constant review and will depend on the behaviour of the reservoir. The reservoir will be closely monitored to yield optimum production, we hear.

Aker Kvaerner has already submitted a revised Front End Engineering and Design study to Reliance. Initial production will be from the Dhirubhai-1 and 3 fields.

Some of the other fields in the block are not economical to produce on a stand-alone basis, we hear. But once the infrastructure is laid these fields can be tied in.

It will then be cheaper to commercialise the additional discoveries. Reliance is now in Phase-II of the exploration period at D6 and is planning more exploration wells even though it has already far exceeded its minimum work programme.

The release of new exploratory drilling locations depends on the availability of rigs and the status of development drilling which is now the top priority. Reliance has entered Phase-II of the exploration period without relinquishing 25% of the block area as required under the PSC.

This is because of the oil ministrys new rules for relinquishments and extensions, which, are being informally applied. Under the new rules an operator that makes a discovery is rewarded by not having to relinquish an area before entering the next phase.