RIL's MJ-1 discovery may hold 1.4 Tcf of gas resources

Reliance Industries’ (RIL) most significant recent gas discovery, MJ-1, in KG-D6 block may hold 1.4 trillion cubic feet (tcf) of gas resources, roughly half of these in the block’s main gas fields.

Located about 2,000 metres below the producing D1-D3 field in the eastern offshore KG-D6 block, MJ-1 might hold contingent resource of between 0.988 tcf (low estimate) and 2 tcf (high estimate) of gas and condensate, according to the firm’s minority partner, Niko Resources of Canada. Niko cited an “independent resources evaluation report for the MJ discovery in the D6 block from Deloitte LLP” to state that the find could hold a best case estimate of 1.4 Tcf of gas and condensate.

The estimate is a comparison to the downgraded reserves of 3.10 tcf in the main Dhirubhai-1 and 3 gas fields, which have been on production for six years. If proved correct, MJ-1 would be the third biggest gas field in KG-D6 after D1&D3 and R-Series, which hold about 2 Tcf of recoverable reserves.

RIL, the operator of the Krishna-Godavari basin KG-D6 block with 60-per cent interest, has so far made 19 gas discoveries, of which D1&D3 were put on production in April 2009. MA oil and gas field was put on production in September 2008.

The Canadian firm holds 10 per cent interest, while the remaining 30 per cent is with BP plc of UK. Niko, which had earlier this year put up its stake in the KG-D6 block for sale, got the resource estimation done on its own. RIL and BP were not party to the exercise.

“Deloitte’s best case estimate of gross unrisked contingent resources of 1.4 tcf of equivalent relates to the Central (North), Northern and Central (South) fault blocks that were drilled by the MJ-1, MJ-A1, and MJ-A3 wells, based on an estimated a real extent of approximately 24 square kilometres, approximately twice the real extent of the analogous MA field that is currently producing,” it said.

Regulatory approval from the Indian government will be required to bring this field on-stream, it said, adding block operator RIL was currently doing appraisal work, and development planning work is underway.

Reliance Industries Limited (RIL)