After a six-year hiatus, Reliance Industries Ltd. (RIL) and its partners BP Group and Niko Resources are moving ahead with a plan to develop R-Series (R-34) ultradeepwater gas fields in the KG-D6 Block (KG-DWN-98/3) on east coast of India off Bay of Bengal.

“BP and Reliance have now agreed to award contracts to progress the development of the R-Series ultradeepwater gas fields in Block KG-D6,” BP Group CEO Bob Dudley said after a meeting with Dharmendra Pradhan, India’s petroleum and natural gas minister, in New Delhi.

The R-Series project is a dry gas development in water depths of more than 2,000 m (6,562 ft) in the Bay of Bengal.

India's upstream regulator has approved the field development plan for the project, which envisages drilling eight development wells to produce between 12 MMscm/d and 15 MMscm/d of gas for 13 years. The project is estimated to cost about $3.18 billion.

The gas field, the CEO said, will be developed as a subsea tieback to the existing control and riser platform (CRP) developed for producing fields in KG-D6. The development plan includes drilling six new wells and two reentry wells and laying subsea pipelines from the proposed wells to the existing CRP to transport gas.

The existing CRP facilities, developed for the two gas-producing D1 and D3 fields, will be used for further transportation and handling at the onshore terminal at Gadimoga.

The deepwater project is expected to produce up to 12 MMcm (425 MMcf) of gas per day from 2020.

R-Series, located in in the southern part of the KG-D6 Block, is estimated to hold in-place reserves of 62 Bcm (2.2 Tcf) while recoverable reserves are estimated to be 34 Bcm (1.2 Tcf).

D-34 was the first gas discovery in this area. It was declared commercially viable in November 2011.

The operator has already floated tenders for the subsea umbilicals, risers and flowlines, and the subsea production systems packages for the R-series. Contracts are expected to be awarded later this year.

Integrated Plan

The R-series project is the first of three projects planned by the operator to be developed through an integrated method. The other two are Satellites and D55.

“We plan to submit development plans for the next two projects (Satellites and D55) for government approval before the end of 2017,” the BP chief said.

“Development of the three projects, which will involve a total investment of up to US$6 billion, is expected to bring a total of 30-35 MMscm/d [1 Bcf/d of gas] of new domestic gas production, phased over 2020 to 2022,” he added.

The execution of the R-Series and two other projects, according to the global major, will require the deployment of advanced skills, processes and technologies to develop and produce gas from these ultradeep reservoirs.

“These projects will be developed in an integrated manner, producing approximately 3 Tcf [85 Bcm] of discovered gas resources,” he added.

Pending Arbitration

RIL and its two partners have taken up these projects despite four pending arbitration cases against the Indian government over production from the KG-D6 Block. Concerns involve disallowing cost recovery as a penalty for gas output not meeting stipulated targets; deferment of a natural gas price hike due to the operator from April 1, 2014; and for demanding $1.55 billion compensation from the operator and its partners for producing gas that belonged to the neighboring field held by ONGC Ltd.

“We don’t see pending arbitration hampering our new investments,” said RIL Chairman Mukesh Ambani. “We are sure we will get a fair outcome, and it will not come in the way of our future investments.”

The operator produces from three fields—D1 and D3 (gas) and MA (oil)—of the more than 20 discoveries made in the KG-D6 Block so far. The two gas fields, which started production in April 2009, produce about 7.4 MMscm/d, down from the peak output of 69.43 MMscm/d in March 2010. Some wells were shut down recently due to water and sand ingress.

Operator RIL owns 60% participating interest in the KG-DWN-98/3 Block, which is spread across an area of 7,645 sq km (2,952 sq miles) in water depth ranging from 400 m to 2,700 m (1,312 ft to 8,858 ft). BP and Niko Resources hold 30% and 10%, respectively.

—Ravi Prasad