RIL, BP Find Gas From KG Basin's R-cluster, Asia's Deepest Offshore Field

Reliance Industries and its partner BP on Friday announced their first gas finding at the R Cluster, an ultra-deep-water gas field in block KG D6, off the east coast of India.

The two companies are developing three deep-water gas projects in block KG D6 – R Cluster, Satellites Cluster, and MJ – which together are expected to meet 15 per cent of India’s gas demand by 2023, the two companies said in a joint statement.

These projects will utilise the existing hub infrastructure in the KG D6 block.

The field is expected to reach plateau gas production of about 12.9 million standard cubic metres per day (mmscmd) in 2021. The next project, the Satellites Cluster, is expected to come onstream in 2021, followed by the MJ project in 2022. Peak gas production from the three fields is expected to be around 30 mmscmd (1 bcf/d) by 2023, which is expected to be about 25 per cent of India’s domestic production and will help reduce the country’s dependence on imported gas, the companies said in the statement. RIL is the operator of KG D6 with a 66.67 per cent participating interest while BP holds 33.33 per cent.

The field, R Cluster, is located about 60 km from the existing KG D6 Control & Riser Platform (CRP), off the Kakinada coast, and comprises a subsea production system tied back to CRP via a subsea pipeline. Located at a water depth of greater than 2,000 metres, it is the deepest offshore gas field in Asia.

ALSO READ: Rajnath Singh to inaugurate India's first hypersonic wind tunnel Saturday

“Through our deep-water infrastructure in the Krishna Godavari basin we expect to produce gas and meet the growing clean energy requirements of the nation,” Mukesh Ambani, chairman and managing director of Reliance Industries Ltd, said in a statement.

BP Chief Executive Bernard Looney said: “This start-up is another example of the possibility of our partnership with Reliance, bringing the best of both companies to help meet India’s rapidly expanding energy needs. Growing India’s own production of cleaner burning gas to meet a significant portion of its energy demand, these three new KG D6 projects will support the country’s drive to shape and improve its future energy mix.”

RIL, with a consolidated turnover of Rs 6.59 trillion, cash profit of Rs 71,446 crore, and net profit of Rs 39,880 crore for the year ended March 31, 2020, is India’s largest private sector company. Its oil and gas segment, however, has been making sustained losses. These losses have been magnified by the company’s US shale operations, with Western Texas Intermediate (the benchmark for US crude oil) prices remaining significantly muted for most of the year.

The company reported Rs 194 crore loss before interest, taxes, depreciation, and amortisation (EBITDA) against the production of 5.377 million barrels of oil equivalent during the second quarter of the current financial year.

The company has been focusing on consumer-centric businesses of retail and telecom even as it operates two petroleum refineries.

In addition to their gas value chain partnership, BP and RIL earlier this year completed the formation of their petroleum retail, aviation fuels, and mobility alliance.

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor