With the commissioning of R Cluster and Satellite Cluster Fields in December 2020 and April 2021 respectively, production has been ramped up to 18 MMSCMD gas.
Following the expected commissioning of MJ Field in
3Q FY 2023, the KG D6 block
>1 BCFe/day by FY 2023-24, thereby contributing ~30% of India’s gas production and helping meet ~20% of India’s demand. This will significantly reduce the country’s dependence on imported gas and meet the growing clean energy requirements of the nation.
Industry recognition R Cluster field development awarded ‘Best Managed Project of the Year’ and 'Special award for significant increase in gas production' by Federation of Indian Petroleum Industry (FIPI)
in offshore installation campaign
Production ramped up to 18 MMSCMD, contributing ~ 20% of India’s domestic gas production
Satellite Cluster commissioned in April 2021, two months ahead of plan despite COVID-19 challenges
To be a major contributor to India’s Gas based economy supplying ~30% of India’s production.
Our mission is to maximise stakeholders’ value by finding, producing and marketing hydrocarbons and to provide sustainable growth while catering to the needs of customers, partners, employees and the local communities in which we do business. We will conduct our business in a manner that protects the environment as well as the health and safety of our employees, contractors and the local communities in which we do business.
India’s leading deepwater E&P operator with best-in-class safety and reliability track record
Partnership with bp synergising RIL’s project execution and operations with bp’s global E&P knowledge
World-class deepwater hub infrastructure in the East Coast
~3 TCFe resources in Block KG D6
Exploration underway in the proven geological fairways of the contiguous Block KG UDW1
Gas-based portfolio contributing to India’s transition towards clean energy
(` IN CRORE)
(` IN CRORE)
|Block||Country||Partner||RIL Stake||JV Acreage
|KG-DWN-98/3||India||bp–33.33%||66.67%||2,90,230||R Cluster Field: Producing from December 2020
Satellite Cluster: Producing from April 2021
MJ Field: Development activities underway
|NEC-OSN-97/2||India||bp–33.33%||66.67%||2,05,520||FDP submitted; under review with GoI|
|KG-UDWHP-2018/1||India||bp–40.00%||60.00%||3,74,093||Exploration activities ongoing|
|SP(East)- CBM-2001/1||India||–||100.00%||1,22,317||Development ongoing|
Global oil demand rebounded in CY 2021, as the global economy began to recover from the impact of the COVID-19 pandemic. However, global oil production increased slower than demand, driving up prices. The production shortfall was mainly due to OPEC+ production cuts that started in late 2020. During 4Q CY 2021, global demand increased sharply by 1.1 MMBD to 99 MMBD. This resulted in withdrawals from global petroleum inventories that averaged 1.4 MMBD in 2021, leading to higher crude oil prices.
Average annual price of Brent crude oil climbed to US$ 70.7/bbl in 2021, ~US$ 30 more than the CY 2020 annual average and highest in the past three years. West Texas Intermediate (WTI) crude oil averaged US$ 3/bbl below Brent in 2021. With an outbreak of conflict in Europe, Brent prices rose sharply to above $110/ bbl levels, reaching as high as $130/ bbl in March'22.
Global gas consumption increased by 4.6% in 2021 to ~3.8 TCM, more than double the decline seen in 2020, driven by the economic recovery and successive extreme weather events. Insufficient supply coupled with unexpected outages led to tight markets and steep price increases. The year closed with record high spot prices in Europe and Asia, as natural gas supply remained very tight. Henry Hub prices almost doubled from their 2020 levels to average US$ 3.9/MMBtu, the highest since 2014. Asian LNG spot prices rose more than four-fold to US$ 18/MMBtu with a 4Q average of over US$ 35/ MMBtu. Record high prices led to dampening of demand growth in the second half of 2021.
Concerns over greenhouse gas (GHG) emissions have heightened global focus on green energy to mitigate the industry’s environmental impact
How RIL E&P is geared up?
At RIL, the focus is on building a gas-based portfolio. Being a cleaner fuel, gas is seen as a transition fuel to green energy
In these challenging times, when prices for oil and gas are volatile, companies are focusing on brownfield developments to improve commerciality
The Company is leveraging its existing infrastructure in the KG Basin to develop three projects in Block KG D6 and is undertaking exploration in contiguous areas. Two of the fields, R Cluster and Satellite Cluster, have been commissioned and production is being ramped up
Accelerated adoption of new technologies as a result of the COVID-19 pandemic, which has reinforced the importance for improved efficiencies
Always at the forefront in the adoption of the latest technologies, RIL is further enhancing its capabilities through Digital Twin, Autonomous Fields, Virtual Command Centres and other cutting-edge technologies
|JV production||Unit of Measurement||FY 2021-22||FY 2020-21|
With ramp up of gas production from R Cluster and Satellite Cluster Fields, E&P's operating performance improved due to incremental production and higher gas price realisation across the producing assets, leading to higher Revenue and EBITDA.
The D1-D3 and MA fields in the KG D6 Block produced ~3 TCFe of gas, oil and condensate, which have set global benchmarks in operational performance and excellence during their operations over the years. These existing facilities have been made future ready for the next 20 years through necessary upgradations made before production start-up from R Cluster and Satellite Cluster fields. The three integrated projects – R Cluster, Satellite Cluster and MJ – are leveraging the hub infrastructure in place by utilising existing production facilities and thus reducing costs. At the onshore terminal, RIL is undertaking augmentation of Monoethylene Glycol (MEG) regeneration and reclamation, and associated facilities.
R Cluster Field was commissioned successfully in December 2020 and achieved peak production of 12.9 MMSCMD with six wells. Satellite Cluster Field was commissioned in April 2021, two months ahead of schedule. All five wells have been opened, tested and ramped up, achieving a peak production of 6.1 MMSCMD. Together, the fields are currently producing ~18 MMSCMD, and contributing substantially to domestic production.
Phase 1 drilling and installation of Xmas Trees for all 8 wells have been completed. Phase-2 drilling and completion activity has commenced in July 2022. The second and final installation campaign has commenced in December 2021. All subsea structures (Manifolds), 24” rigid pipeline and Turret Mooring System (TMS) buoy, along with mooring lines, have been installed.
For the Floating Production Storage & Offloading (FPSO) vessel , hull construction has been completed. All topside modules have been fabricated and erected on the hull.
Geostationary and Swivel modules have been installed. Pre-commissioning and commissioning activities have commenced. Reliance expects to commission MJ Field in 3Q FY 2023.
The D1D3 Field ceased production in February 2020, following which the Oil Industry Safety Directorate (OISD) and Management Committee (MC) have approved the permanent Plug & Abandonment (P&A) of wells and in-situ abandonment of the associated equipment.
Following cessation of production in MA Field, freeing flexible flowlines of hydrocarbons and the flushing of umbilicals were completed, and the floating production storage and offloading (FPSO) unit was demobilised. The flexible flowlines, dynamic flexibles, dynamic umbilicals, subsea structures, mooring lines and the Submerged Turret Production (STP) buoy were decommissioned in accordance with the Field Decommissioning Plan, which was approved by the OISD and the MC. Well P&A has been completed for all MA wells.
RIL and its partner bp acquired Block KGUDWHP-2018/ (KG-UDW1) under the OALP II licensing round. The Petroleum Exploration License (PEL) was issued in August 2019, with 341 days’ extension of the Initial Exploration Phase granted in 2021. Despite the pandemic and related challenges and constraints, the 3D Seismic Acquisition campaign was completed in the Block. Currently, Data Processing and Interpretation work is ongoing for prospect maturation, with a plan to drill the first exploration well in 2023.
RIL is currently producing Coal Bed Methane (CBM) from Block SP (West)– CBM–2001/1. More than 300 wells are in production, with an average output of 0.73 MMSCMD gas during the year. To sustain plateau production, CBM development is being undertaken in Blocks SP (West)–CBM–2001/1 and SP (East)–CBM–2001/1.
Reliance Gas Pipeline Limited, a subsidiary of RIL, operates the 302 km Shahdol-Phulpur Pipeline from Shahdol (MP) to Phulpur (UP), connecting the CBM gas fields with the Indian gas grid, thus providing access to consumers across the country.
During the year, Reliance Eagleford Upstream Holding, LP (REUHLP) a wholly owned step-down subsidiary of RIL, signed an agreement with Ensign Operating III, LLC to divest its interest in certain upstream assets in the Eagleford shale play of Texas, USA. With this transaction, RIL has divested all its shale gas assets and exited from the shale gas business in the US.
Due to the continuing COVID-19 related circumstances, there has not been any material progress in the following matters: KG D6 Cost Recovery Arbitration, Public Interest Litigations (PILs) relating to the KG D6 Block pending before the Hon’ble Supreme Court of India, suit filed by NTPC Limited against RIL before the Hon’ble Bombay High Court, Government of India’s proceedings seeking setting aside the arbitration award relating to the alleged migration of gas from KG D6 Block before the Hon’ble Delhi High Court, and the Writ Petition filed by RIL before Hon’ble Delhi High Court relating to the jurisdiction of the Delhi Anti- Corruption Bureau.
The Arbitration Tribunal unanimously decided certain issues in favour of BG Exploration and Production India Limited and RIL (together the ‘Claimants’) in its final partial award dated January 29, 2021. Government of India filed a challenge and an appeal before the English High Court against the January 29, 2021 final partial award, which has been decided in Claimants' favour on 9 June 2022 (subject to a limited further right of appeal). In addition, the Tribunal commenced hearing the Claimants’ application for increase in PSC Cost Recovery Limits at the end of 2021 and will continue hearing the said application in various hearing tranches in 2022 and 2023.
Further, arguments have been ongoing in the execution petition filed by the Government of India before the Hon’ble Delhi High Court, seeking enforcement and execution of the Tribunal’s 2016 Final Partial Award.
RIL is engaged in R&D efforts to increase recovery from CBM fields. The current focus of this research is Bio-CBM. In CBM, methane gas is produced that is adsorbed and trapped naturally in coal seams. The Bio-CBM technology uses microbe injection to produce in-situ methane in places where either the coals are devoid of methane or conventional CBM extraction is uneconomical.
Lab tests have shown encouraging results on the potential of methane production. Research is underway to verify if this technology can be scaled up to commercial level. RIL is leveraging its infrastructure (advance laboratories), diverse inter-disciplinary technical skills, CBM production expertise, CBM fields and knowledge of regulatory requirements to boost the Bio-CBM research.
Gas is expected to play a key role as a transition fuel and share of gas in energy mix is expected to increase from 6% to 15% by CY 2030.
Globally, gas markets are becoming tighter and gas prices have seen spikes across Europe, Asia and also India. With the resurgence in economic activities, receding COVID-19 cases , ongoing geopolitical conflict in Europe and gas supplies trailing demand, gas prices are expected to remain high in the medium term.
With all three fields in production, the KG D6 Block will produce >1 BCFe/day by FY 2023-24, thereby contributing ~30% to India’s gas production and helping meet ~20% of India’s demand. This will help reduce the country’s import dependence and meet the growing clean energy requirements of the nation.