Reliance Industries' flagging eastern offshore KG-D6 block holds 3.7 times more established gas reserves at 2.6 trillion cubic feet, the company's minority partner Niko Resources said.
Reliance Industries’ flagging eastern offshore KG-D6 block holds 3.7 times more established gas reserves at 2.6 trillion cubic feet, the company’s minority partner Niko Resources said.
Niko, which holds 10 per cent interest in the KG Basin block, in its earnings statement for 2015-16 fiscal said its share of proved reserves in KG-D6 block stands at 265 billion cubic feet of gas equivalent (2.65 Tcf for 100 per cent interest).
After adding probable reserves, this jumps to 406 billion cubic feet of gas equivalent (Bcfe) or 4.06 Tcf.
This compares 70 Bcfe of proved reserves for Niko’s 10 per cent share stated in the financial statement for the previous fiscal ended March 31, 2015.
“Proved reserves and proved plus probable reserves of 265 Bcfe and 406 Bcfe, respectively, for the D6 Block in India as at March 31, 2016 reflect the reclassification of reserves for the R-Cluster and Satellites undeveloped discoveries from probable reserves to proved reserves and the addition of reserves for the MJ and Other Satellites undeveloped discoveries due to the economic viability of the development of these discoveries at the prices assumed in the reserve evaluations of these fields,” Niko said.
RIL, which is the operator of the block with 60 per cent interest, has so far brought to production only two gas and one oil discoveries out of the 19 find it had made so far.
Hydrocarbon reserves are classified as proved (P1), probable (P2), or possible (P3) depending on their potential for being converted into actual production.
P1 reserves are one which have 90 per cent certainty to be produced while probable reserves are one with 50 per cent certainty. P3 reserves are one with just 10 per cent chance of being produced.
BP plc of UK holds the remaining 30 per cent stake in KG-D6 block.
Niko Chairman and interim CEO Kevin J Clarke said with the government approving pricing freedom, subject to a cap, for discoveries in high pressure-high temperature, deepwater and ultra-deepwater areas, the KG-D6 consortium is moving ahead with developing the undeveloped discoveries.
The new natural gas pricing guidelines apply to future discoveries as well as existing discoveries which had yet to commence commercial production as of January 1, 2016 (such as existing undeveloped discoveries in the D6 Block in India).
“The contractor group of the D6 Block (RIL-BP-Niko) is taking the necessary steps towards development of the R- Cluster, Satellites and MJ discoveries in the D6 Block,” he said.