BP surrenders 12 oil and gas blocks
New Delhi: UK's BP plc has relinquished, or surrendered, 12 out of the 21 oil and gas blocks where it had bought 30 percent stake from Reliance Industries for USD 7.2 billion, due to poor hydrocarbon prospects.
BP had in February, 2011 bought 30 percent stake in a total of 23 oil and gas blocks of RIL including the gas discovery areas of KG-D6 and NEC-25. The Cabinet had however approved of BP taking stake in 21.
RIL-BP have since then given up 12 areas.
"As part of continued evaluation of high grade the portfolio and focus our efforts, 12 of the blocks acquired were relinquished in 2012," BP said in its annual report for 2013.
The joint venture is currently focused on reviving the flagging eastern offshore KG-D6 fields and bringing the North-East Coast NEC-25 discoveries to production.
Besides the nine blocks with RIL, BP also holds 50 percent interest in a Krishna Godavari basin exploration block.
As a result the relinquishments, RIL's portfolio of oil and gas blocks has come down from 28 to just 13.
RIL has given up the Sonhat coal-bed methane (CBM) block SH(North)-CBM-2003/II, in the Gondwana coal fields, as well as some exploration acreage it held solely, the company said in its annual report for 2012-13.
BP in its annual report said it along with RIL continued to work on activities that will help ramp-up output from KG-D6.
"Activities to arrest the decline in production on Block KG-D6 fields were approved by the relevant authorities and execution planning has commenced," it said.
The government also approved the submitted Field Development Plan (FDP) of Satellite I discoveries and declaration of commerciality of R-Series finds in the block.
In all, 18 gas fields have been discovered in KG-D6 block so far. Of these, only two (Dhirubhai-1 and 3) have been put to production. Satellite fields are now being planned to be developed.
RIL said the fall in production to about 15.5 million standard cubic meters per day was mainly due to "geological complexity, natural decline in the fields and higher than envisaged water ingress".
To augment production from the current fields (D1-D3 and MA oil and gas field), various Base Management actions, including work overs, side tracks, compressor, enhancement of water handling capacity and a new well in the MA field, will be undertaken in FY2013-14.
"The next wave of projects in KG-D6 block are envisaged to be undertaken over the next three to five years and entail a potential total investment in excess of USD 5 billion to develop around 4 trillion cubic feet (TCF) of discovered natural gas resources," RIL said.