KG gas output falls as RIL drills fewer wells

Reliance Industries Ltd (RIL) has fallen short of its commitment on drilling wells on the eastern offshore KG basin gas field that has seen a sharp fall in production, the Director General of Hydrocarbons (DGH) said on Monday.

Reliance had committed to drill 22 wells on Dhirubhai-1 and 3 fields in the KG-D6 block by April 2011 to produce 53.4 million standard cubic meters of gas per day (mmscmd). Another eight to nine mmscmd output was to come from MA oilfield in the same block, taking the total output committed in the field development plan to 61.88 mmscmd by April 2011.

But Reliance has so far drilled and completed 18 wells on D1 and D3 fields giving a combined output of about 42 mmscmd, DGH director general S. K. Srivastava said. Two other wells have been drilled but not connected to the production system.

"Reliance has to drill two more wells by April," Srivastava said but did not say what action the government or DGH can take if RIL failed to honour its commitment.

On Monday, the RIL stock fell Rs 2.65 on the BSE to close at Rs 1,023.