Imposition of fine on RIL for Shortfall in Gas Production
The Minister of Petroleum & Natural Gas Dr. M. Veerappa Moily informed the Rajya Sabha in a written reply today that the average gas production from KG-DWN-98/3 (KG-D6) block during the current year (2012-13 upto October, 2012) was about 29.81 Million Standard Cubic Meter Per Day (MMSCMD) as against 86.73 MMSCMD approved in the Field Development Plans (FDPs) of D1, D3 & MA fields in this block, which are currently on production. The decline in gas production from KG-D6 block is due to the following reasons:
1. Out of a total 18 gas producer wells in D1 & D3 fields, 6 wells have ceased to produce gas due to water loading/sand ingress in wellbores.
2. Out of a 6 oil/gas producer wells in MA field, 2 oil/gas producers have ceased to flow oil/gas due to water ingress in wellbores.
3. Non drilling of the required number of gas producer wells in D1 & D3 fields by the Contractor in line with the Addendum to Initial Development Plan (AIDP) approved by the Management Committee (MC).
Further, the Contractor has submitted the following reasons for less gas production as compared to AIDP of D1 and D3 fields:
1. Considering the reservoir behavior based on existing wells in main channel area, as well as the reservoir characteristics in overbank areas of D1 & D3 fields, any additional wells in D1 & D3 fields, may not help improve either production rate or recovery.
2. Substantial variance in Reservoir Behavior and Character has been observed vis-Ã -vis the prediction, and there seem to be reservoir constraints in achieving the gas production rates.
3. Pressure decline is several times higher than originally envisaged.
4. Early water production in some of the wells was not predicted in initial reservoir simulations, though overall field water production is small.
5. The Contractor’s inability to firm up appropriate drilling locations on plea of geological complexities.
He also emphasized government have not accepted the contention of the contractor and have ordered proportionate disallowance of cost of production facilities amounting to US$ 1.005 Billon for not fully implementing approved AIDP. RIL has initiated arbitration proceedings on the disallowance and Government of India have also appointed an arbitrator.
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RCJ/RKS
(Release ID :89534)