After forming a strategic partnership with BP, India's Reliance Industries Ltd. (RIL) has lined up a US $5 billion investment plan to reverse falling gas production from the deepwater KG-D6 block, off Bay of Bengal.

RIL and its partners will undertake “a series of projects” to raise the block’s gas output that has dropped to less than 16 MMscm/d from the peak of 64 MMscm/d three years ago, RIL chairman Mukesh Ambani said.

“RIL and BP have submitted the KG-D6 block enhancement plan using existing infrastructure to increase production from the block. Under this plan, we are planning to invest in a series of projects to develop around 4 Tcf of discovered natural gas resources from the block," Ambani told the company’s shareholders in a letter.

The integrated development plan would primarily focus on initiation of new base management activities in three developed fields – D1, D3 and D26 (MA); exploration of a prospect to test a possible hydrocarbon pool below the current producing fields; and development R-Series and satellite discoveries over the next three to five years.

Ambani said his company would undertake various base management activities, including drilling new wells, workovers, sidetracks, compressors, and enhancement of water handling capacity in all three producing fields to augment gas production.

The regulator, Directorate General of Hydrocarbons (DGH), has approved drilling a new well (MA-8) and sidetracking two ceased wells (MA-6H and MA-7H) in the MA field to increase gas production and modification of gas injection compressor at the associated FPSO to supply the produced gas.

So far, RIL has drilled six wells in the MA field, the only oil and gas discovery among the 18 finds the company had made in KG-D6 block.  But, it had closed two of the six wells due to high water and sand ingress, which led to the fall in output to less than 4 MMscm/d in the first week of May, from more than 8 MMscm/d three years ago.

The operator has proposed installing a new compressor at an onshore terminal to increase gas recovery from D1 and D3 fields where water and sand ingress have pulled down production to around 12 MMscm/d from the peak of about 54 MMscm/d achieved in March 2010.  New reclamation trains are to be installed to pump excess water from the fields.

The company had shut down 9 of the 18 wells drilled in the D1 and D3 gas fields because of water loading and sand ingress in wellbores.

RIL also would take up exploration of a prospect in the D1-D3 lease area to test a possible hydrocarbon pool below the current producing field. “Currently, MJ1 exploratory well in D1-D3 ML area is under drilling. The well is targeting the Mesozoic synrift clastic petroleum system, similar to the MA oil and gas field,” the company said in its annual report for 2012-13.

A plan to develop R-Series fields has been prepared. The plan, submitted to DGH for approval, aims to add incremental production and to maximize infrastructure utilization of the existing D1 and D3 hub.

In addition, development of all nine satellite discoveries is being planned as part of an integrated concept. The R-Series and satellite fields have the potential to add a gas supply of 30 MMscm/d.

“We believe gas from these projects will deliver energy to millions of Indians and would significantly help India in reducing import dependence,” Ambani said.

The three fields produced about 2 Tcf of gas and 22 MMbbl of oil by year-end 2012. It pumped out 3.31 MMbbl of crude oil and condensate and 336 Bcf of natural gas in fiscal year 2012-13.

BP, which acquired 30% PI in KG-D6 block and nine other blocks as part of a strategic partnership, is studying the complex geology of the deepwater block to map an exploration and development campaign that would efficiently target high quality prospects in deeper zones and optimize existing as well as future development plans.  The global major has agreed to provide its deepwater development capabilities to the Indian partner to augment gas production from the deepwater block in Bay of Bengal with water depth ranging from 400 m (1,312 ft) to 2,700 m (8,858 ft).  

“The (BP-RIL) JV has made significant progress towards finding new resources through exploration by identifying new prospects in its deepwater acreages in the East Coast. Further, the JV through extensive efforts is poised to unlock value from its existing discovered resource base by advancing its planning for the next wave of projects in KG-D6,” RIL said.

BP claims that it has experience in producing gas from more than 1,500 m (4,921 ft) below the sea level.

The recoverable gas reserves in KG-D6 block are estimated to be between 5 Tcf and 5.5 Tcf, mostly located in ultra-deep waters. Operator RIL holds 60% PI in the deepwater block, while the Canada-based Niko Resources owns the remaining 10%.