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Monday, Oct 25, 2021
Outlook.com

Geological Surprise?

It’s strange the govt seems keen on giving Reliance an alibi for the gas production shortfall in KG basin.

Geological Surprise?
Geological Surprise?
outlookindia.com
-0001-11-30T00:00:00+05:53

The petroleum ministry has moved a cabinet note for not applying the revised gas price of $8.4 per mmBtu to the output from Reliance’s KG-D6 block until the production shortfall is made good or it is proven that the causes for it were beyond Reliance’s control. Planning Commission deputy chairman Montek Singh Ahluwalia was quick to oppose it: “It could adversely impact the investment climate the same way retrospective tax amendments did.” He rapped the ministry for not appointing an international consultant to examine the issues, a suggestion petroleum minister Veerappa Moily is looking at.

“Geological surprise” is cited as the cause of Reliance’s production shortfall. KG-D6 block commenced production in September 2008 with 0.58 million standard cubic meters per day (mmscmd) reaching a peak of 69.43 in March 2010 and then declined to 13 mmscmd currently. Reliance attributed the decline to substantial variance from prediction in reservoir behaviour, higher than envisaged pressure decline and unpredicted early water production in...

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