Reliance Industries Ltd. (RIL) has cut estimates for proven gas reserves in its Indian blocks by 7% to 3.67 trillion cubic feet (tcf), according to reports.
Reports stated that the figures were released by RIL in its FY2011/12 annual report.
Depleting gas output from the KG gas fields off India's east coast has hurt RIL's business prospects and the stock price over the past several months.
Meanwhile, Union Petroleum Minister Jaipal Reddy said yesterday that gas output from RIL's KG-D6 block is projected to decline to 20 million standard cubic metres a day (mmscmd) in FY15 from an estimated 28 mmscmd in this fiscal year.
Proven reserves in RIL's KG-D6 block now stand at 6.11 tcf, down from the last year’s estimate of 6.56 tcf. Out of these, RIL’s share stands at 3.67 tcf, while 30% will go to BP and 10% to Canadian company Niko Resources.
BP had, in its annual report in December 2011, pegged KG-D6 reserves at just 1.4 tcf, while Niko had pegged the same at 6.8 tcf. Niko says the reserves require revision.
RIL, which now owns 60% in the KG D6 block, has seen gas production from the two producing D1 and D3 wells falling since the third quarter of FY11.
The field’s recorded peak output is 55.6 mmscmd. For the year to March 2012, KG D6 gas production averaged 43 mmscmd. In the last quarter (Jan-Mar 2012), it averaged 36.2 mmscmd. But by April, production had fallen to 22 mmscmd.
Mukesh Ambani says in the annual report that RIL is working on an integrated development plan with its UK partner British Petroleum (BP).
“Significant steps have been taken by the joint technical teams in assessing options for overall reservoir management based on which, an integrated plan for work-overs and additional wells can be executed, subject to necessary regulatory and government approvals,” he said in a letter to the RIL shareholders.