Reliance, Niko start production at MA oil field off eastern India

Oct. 13, 2008
Reliance Industries Ltd., Mumbai, and Niko Resources Ltd., Calgary, began a new chapter in India’s hydrocarbon production with the startup of MA oil field in the Krishna-Godavari basin in the Bay of Bengal.

Reliance Industries Ltd., Mumbai, and Niko Resources Ltd., Calgary, began a new chapter in India’s hydrocarbon production with the startup of MA oil field in the Krishna-Godavari basin in the Bay of Bengal.

Crude oil output began on Sept. 17, 2008, at the early rate of about 5,000 b/d of 42° gravity crude. The field, in 8,000 ft of water on the KG-D6 block 50 km off Kakinada, is expected to reach target peak production of 40,000 b/d of oil in a few months.

Exploration on the 7,645 sq km D6 block is far from complete, however, and further exploratory drilling is planned in Niko Resources’ 2009 fiscal year that began Apr. 1, 2008.

Development of giant Dhirubhai 1 and 3 gas fields on the same block is substantially complete, and gas production is to start in the third calendar quarter of 2008.

Phase 1 development cost is estimated at $5.2 billion.

Conceptual studies are under way for the development of eight other gas discoveries on the D6 block adjacent to and to be tied back to Dhirubhai 1 and 3 gas fields.

Dhirubhai 1 and 3 gas fields are expected to reach combined production of 2.8 bcfd of gas in the first year. The facilities are designed with capacity to increase output to 4.2 bcfd. The government established a pricing formula that will result in a sales price of about $4.20/MMbtu.

MA oil field

Niko Resources pointed out that MA oil field:

  • Is India’s first deepwater hydrocarbon producing area.
  • Produces a grade of oil that can be processed at any refinery in India.
  • Has been placed on production in the 30th month after its discovery, making it one of the world’s fastest greenfield deepwater developments.
    Click here to enlarge image

    Initial field development cost is estimated at $1.5 billion.

    Niko Resources also noted that production was “achieved against challenges like difficult ocean conditions, lack of adequate subsea data, low seabed temperature of 5° C., severe supply chain constraints, and shortage of technical manpower.”

    Serving MA field is the Dhirubhai-1 FPSO, the first vessel of its kind in Indian waters. The vessel, converted and delivered by Aker Floating Production, can operate in more than 1,200 m of water and can withstand harsh environment and sea conditions off Andhra Pradesh. It has a disconnectable turret mooring system, insulated manifold, and short, flexible flow lines.

    Aker Solutions ASA manufactured and delivered the field’s subsea production system and managed the subsea equipment installation (OGJ Online, Sept. 23, 2008). Both the subsea system and FPSO were delivered less than 16 months after the award of the contracts.

    The KG-D6 block in Krishna Godavari basin was awarded to Reliance Industries and Niko Resources under NELP-I. Block interests are Reliance Industries 90% and Niko Resources 10%.