The government of India has approved an increase the price of natural gas sold domestically that will improve economics of development planned around deepwater KG D6 gas field off the countryâs southeastern coast.
According to a partner in the D6 block, Niko Resources Ltd. of Calgary, a formula approved by the Cabinet Committee of Economic Affairs (CCEA) yields a gas price on Apr. 1, 2014, around $8.40/MMbtu, double the current price for gas sales from the block.
Reliance Industries Ltd., which operates the block with a 60% interest, along with BP, 30%, and Niko, 10%, announced plans earlier this year to invest $5 billion over 3-5 years to further develop KG D6 field, production from which has been disappointing.
The group had been under political pressure to increase drilling but insisted the problems related to reservoir complexity rather than well count (see figure, OGJ, Apr. 1, 2013, p. 62). Before announcing the investment plan, RIL had sought international arbitration to settle the controversy.