RIL in hot oil over low output from KG field

The Directorate General of Hydrocarbons (DGH), the oil ministry's exploration and production monitoring agency, has asked Reliance Industries Ltd to explain lower than expected oil production from the Krishna-Godavari D6 offshore field, which RIL operates. Reports say crude oil production from the D6 block has dropped by over 31 per cent.

RIL, which began commercial production of crude oil from these mainly gas-rich wells in September 2008, had reported an oil output of 34,041 barrels in the second year, and a considerably lower 28,684 barrels as production entered the third year. (See: Crude production at RIL's eastern fields dropping: report)

"The reservoir is not working as per predictions. Daily production has dropped hugely, from 32,000 barrels a day in the month of May to 22,000 barrels at present," an official from RIL's partner in the field, Niko Resources, was quoted as saying.

The DGH, in a letter written two weeks ago, also expressed ''serious concern'' over the performance of the oilfield. Separately, it pointed out that the two gas fields in D6 were producing just 48-50 million metric standard cubic metres of gas a day, considerably lower than the 80 mmscm a day foreseen in the development plan.

The DGH letter, highlighting its concern over low oil output, was written on the second anniversary of the D6 starting oil production.

''The field development plan envisaged a plateau oil production of of 34,041 barrels of oil per day in the second year of production. The current production rate is about 22,000 barrels of oil per day only,'' Gautam Sinha, DGH's head for production, pointed out in a letter to Reliance Industries vice president B Ganguly.