NEW DELHI: Reliance Industries has decided to relinquish a Krishna-Godavari basin block after it established that the lone natural gas discovery in the area was not viable, the company’s minority partner Hardy Oil & Gas said on Tuesday.
RIL, which had won the KG-DWN-2001/1 (D9) block in the third round of New Exploration Licensing Policy (NELP) in 2003, had in June last year found gas in the second well on the area that sits in next to the prolific KG-D6 block.
On Monday, RIL proposed to return the licence because the block’s gas potential was low and further exploration was not needed, Hardy, which holds 10% interest in the block, said in a statement.
RIL is the operator of the block with 60% stake and UK’s BP holds the remaining 30%.
“On April 23, 2012, the company (Hardy) received a proposal from RIL … for the relinquishment of the block. The proposal set out that following the integration of all geoscientific data and the results of the three exploration wells, including the KG-D9-A2 natural gas discovery, that the block’s hydrocarbon potential is low and further exploration or appraisal activity is unwarranted,” the statement said.
Hardy, it said, has agreed to RIL proposal.
RIL had not found any hydrocarbon reserves in the first well drilled on the block in October 2009. Subsequently, it drilled two wells in 2011 — KG-D9-B3 well was plugged and abandoned in January last year while a natural gas discovery was announced in KG-D9-A2 well (later named Dhirubhai-54) in June 2011. The company had time until July this year to submit an appraisal programme.