In an announcement that is set to bolster India’s gas output significantly, Reliance Industries Ltd has been granted government approval to undertake additional investments aimed at enhancing gas production in the KG-D6 block, located in the Bay of Bengal. This fresh lease of investment will potentially increase the current production by 4 to 5 million standard cubic meters per day. The revelation was part of the updates shared during a recent investor call discussing the company’s fourth-quarter earnings.
Sanjay Roy, senior vice-president for exploration and production at Reliance Industries Ltd, stated that the government-sanctioned development plan is poised to deliver incremental production in the coming years. This boost is expected to augment the already significant production levels that Reliance and its partner bp Plc achieve, which accounts for roughly 30 mmscmd or about 30 percent of India’s total gas production, from the KG-D6 block.
Despite the promising news, specific details regarding the scale of investment approved remained undisclosed. It is pertinent to note that Reliance-bp currently extracts around 30 mmscmd of gas from three sets of discoveries within the deep-sea KG-DWN-98/3 or KG-D6 block, with the most recent – the MJ oil and gas field – being commissioned in May 2023. These sets of discoveries, including the deepest, MJ, were identified over a decade ago and have since been progressively brought into production.
The journey to elevate KG-D6’s output commenced with the R-Cluster field coming online in December 2020, followed by the Satellite Cluster in April 2021. The impact of this development on India’s domestic natural gas production has been considerable, boosting it to a multi-year high of 99 mmscmd. Nonetheless, with total gas demand in the country estimated at 188 mmscmd, a substantial portion still necessitates imports to cover the shortfall.
Roy highlighted the noticeable jump in production since FY21, pointing out that while domestic production stagnated, KG-D6 contributed almost 90 percent to the incremental domestic gas production. Reliance, as the operator of the KG-D6 block, holds a 66.67 percent interest, with bp owning the remaining 33.33 percent.
To date, Reliance has made 19 gas discoveries in the KG-D6 block. Its notable fields, D-1 and D-3, which were the largest among them, commenced production in April 2009, alongside the MA, the only oilfield in the block that started operations in September 2008. Although the MA field ceased output in September 2018, and the D-1 and D-3 fields in February 2020, the companies have been undeterred in their pursuit of energy advancement.
Following the cessation of the D-1 and D-3 fields, Reliance-bp committed a substantial investment of USD 5 billion in harnessing three deepwater gas projects within the KG-D6 block — R-Cluster, Satellites Cluster, and MJ. Located around 2,000 meters beneath the Dhirubhai-1 and 3 (D1 and D3) fields, the MJ field is a notable high-pressure and high-temperature (HPHT) gas and condensate field. Its potential peaks at a production of 25,000 barrels of condensate per day.
The strategic steps taken by Reliance and its partner bp in developing the KG-D6 block’s reserves reflect a firm commitment to bridging the nation’s energy gap. With the Indian government’s support and approval of these additional investments, the companies are setting the stage for a more self-reliant energy future for India. The incremental production from the KG-D6 block not only adds to the already expanding portfolio of indigenous resources but also underlines the increasing focus on sustainability and energy security by reducing the dependence on imports. The energy landscape in India is on the cusp of a transformative change, driven by such significant endeavors in the oil and gas sector.
