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• The petroleum ministry on Tuesday approved optimum field development plan (OFDP) for four satellite gas fields on the fringes of the Reliance Industries-operated KG-D6 block. This may cost RIL and its partners nearly $1.52 billion. The company has targeted these satellite fields in KG-DWN-98/3, popularly known as KG-D6, to shore up its hydrocarbon output. Gas output from KG-D6 block has touched it lowest since it started commercial production in 2009. The fields in the block produced just 39.80 mmscmd last month. Mukesh Ambani-promoted RIL has estimated gas reserves of these four-satellite fields (D-2, D-6, D-19 and D-22) at 1,733 billion cubic feet. Out of this, 626 bcf could be commercially drilled.

• The steep decline in output from KG-D6 has caused fuel scarcity for several industries such as power, fertilisers, steel, refineries, petrochemicals and entities in city-gas distribution. At present, gas from KG-D6 is supplied only to priority sectors — fertiliser, power and LPG units. Recently, the petroleum ministry has proposed to cancel allocation of KG-D6 gas to merchant power producers and fertiliser plants that produce potash and phosphatic fertilisers. These four new satellite fields may add 10 mmscmd in five years to the existing output from entire KG-D6 block.“This approval will allow the explorers to carry out exploration activities in these four fields during favourable weather conditions,” said an official privy to the development.The decision was taken at a meeting of the management committee comprising officials from RIL and its foreign partner BP, oil ministry and the upstream regulator, directorate general of hydrocarbons (DGH), in Delhi on Tuesday. Financial Chronicle reported on December 20 that RIL has sought ‘conditional’ nod to explore satellite fields in KG-D6. RIL has explained to the oil ministry that the current weather conditions in KG basin are favourable for carrying out technical studies. If these studies are not conducted in the next couple of months, the project would be delayed by another year. Following RIL’s plea, petroleum secretary GC Chaturvedi and joint secretary-exploration DN Narasimha Raju discussed the issue with RIL and BP officials on December 21 and agreed to convene a management committee meeting.

• At the same time, BP group chief executive Bob Dudley and BP’s regional president and head of country-India Sashi Mukundan, separately wrote to oil minister S Jaipal Reddy seeking approval for field development plan, sea-bed surveys and front-end engineering and design (Feed).Earlier, the management committee for the block had advised RIL to submit a revised capital expenditure plan for the satellite fields. “Having undertaken two projects on the east coast in the same block, we could presume a reasonable knowledge of general uncertainties. Therefore, in the sensitive analysis, a range of plus or minus 30 per cent was included in the submitted OFDP,” RIL told the petroleum ministry on December 23.“These cost uncertainties get fine tuned as one progresses through field surveys, engineering studies, ordering of major contracts and project execution,” RIL added.SK Srivatava, the director general of hydrocarbons, did not answer repeated calls made to his cell phone for comments on the issue.

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