RIL shuts down oil field in KG D6 block

Reliance Industries, one of India’s largest petroleum producers, said its D26 oil field in the KG-D6 offshore block has ceased production, a decade after oil started flowing from the field.

The D26 was one of the three prolific fields of the D6 block. A field, in oil and gas terminology, is a smaller area within a block. The other two fields in the block, D1 and D3, are still producing.

The company is estimated to have spent billions of dollars to develop the D26 oil field, which was supposed to supply oil and gas for at least 15 years.

In total, the field produced 31.4 million tons of oil and condensate. At an average of around $60 per barrel, the output is worth about $1.88 billion.

In addition, the field also produced about 0.53 trillion cubic feet of natural gas, worth about $2.1 bln, taking an average price of $4 per 1000 cubic feet.

The output of the field was impacted by structural problems with the seven wells, which led to the ingress of water and sand. The field had no remaining reserves, RIL said.

The company was using a leased, custom-built floating production storage and offloading unit — a kind of floating rig — to handle the output from the field.

The Dhirubhai – 26 (D26), oil, gas and condensate deep water discovery was made in 2006 and was put on production in September 2008.

With a water depth of over 1 km, it was India’s first deep water development.

The block was also the subject of a bitter corporate battle between Reliance Industries’ Chairman Mukesh Ambani and his brother Anil Ambani, who claimed the right to use part of the gas output to produce power.

However, government of India intervened in the dispute, claiming full ownership of the gas and denying Anil Ambani’s claim.

RIL said it has informed governmental agencies about the shutdown.

Besides Reliance, BP (30%) and NIKO (10%) own stakes in the D6 block.