RIL reduces estimates for KG basin

RIL reduces estimates for KG basinReliance Industries Limited has lowered its estimates for the gas reserve at the Krishna-Godavari block by 6.7 per cent to 3.67 trillion cubic ft as the production from the block continues to fall.

The company said that in its annual report that the gas reserves at the Krishna-Godavari block might be lower than earlier estimated. The gas production from Reliance Industries' KG-D6 block have fallen to its lowest level ever to the level of about 28 million standard cubic meters per day after the company had to close down six wells because of water and sand ingress. The Dhirubhai-1 and 3 gas fields in the block saw I saw a significant fall in production.

The company has said in a report hat out of the total 18 wells drilled, eight had to be closed. Reliance holds 60 per cent interest in KG-D6, UK's BP Plc holds 30 per cent and Niko Resources of Canada holds the remaining 10 per cent.

The government says that the company is to blame for the fall in production but Relaince says that geological complexities caused the fall in production. The government recently increased the penalty on the company for lower production output from the block.