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Reliance Shuts Down Oilfield Following Output Decline

The field has cumulatively produced about 15 million cubic meters of gas and 31.4 million barrels of oil and condensate.The field has cumulatively produced about 15 million cubic meters of gas and 31.4 million barrels of oil and condensate.

India’s Reliance Industries has shut down an oil and gas field in the offshore Krishna-Godavari basin after its production rates began to decline several months ago, the company said in a regulatory filing.

The Indian heavyweight partnered on the field, which first yielded oil in 2008, with BP and Canada-listed Niko Resources, Oil Price reported.

“Production from the field had been under natural decline and facing continuous challenges due to high water production and sand ingress. The field has cumulatively produced about 15 million cubic meters of gas and 31.4 million barrels of oil and condensate, and had no remaining reserves,” the statement read.

The Indian government has been making efforts recently to increase domestic oil production, as it seeks to reduce its overwhelming dependency on imported crude, which accounts for more than 80% of the national consumption.

The problem has become particularly pressing in recent months, as rising oil prices combined with a falling rupee has caused India’s oil import bill to balloon and spark protests against high gas prices at the pump.

India is also Iran’s second-largest oil client, which means that US sanctions that return in early November would further aggravate the situation as local refiners seek ways to continue importing Iranian crude, which sells at a considerable discount.

Regarding Reliance’s decision to stop pumping oil from the MA-D26 Oilfield in the Krishna-Godavari basin block KG-D6, Reuters noted that when the company decided to enter the oil and gas sector, its chief, Mukesh Ambani, had promised that Reliance would produce 45% of India’s oil by 2010, saving the country some $20 billion from oil imports.

Despite the production decline in MA-D26, the company is not leaving the Krishna-Godavari basin altogether.

In its annual financial report released in May, Reliance said it will invest, together with BP, some $4 billion in new exploration and produce 35 million cubic feet of natural gas daily during 2020-22.

 

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