Reliance Industries is set to spend $60 million, drill for 65 days in D1, D3 fields. Reliance Industries (RIL) and its foreign partners BP and Niko Resources have commenced fresh drilling at the D1 and D3 fields, the mainstay of the KG-D6 block, hoping to increase the block’s output. Production at the KG-D6 block is currently hovering around a dismal 11 million metric standard cubic metre per day (mmscmd), a far cry from the peak of over 69 mmscmd achieved in early 2010. According to sources, RIL, together with its partners, last week began what is called “sidetrack drilling” in D1-D3, which will cost $60 million to complete. Sidetrack drilling is done to raise production from a producing block to extract reserves not possible by regular drilling. “A rig has been deployed costing $395,000 per day. If the results from the first well appear positive, the company could expand the sidetracking programme,” a source explained. “After completing the initial 65-day drilling programme, the data will be analysed to determine whether production can be ramped up using this method in the remaining fields,” the source added. Meanwhile, RIL and its two foreign partners are yet to decide whether they will conduct a drill stem test (DST) or take the risk of not performing this regulatory requirement. As reported by FE earlier, given that two explorers — state-run ONGC and RIL — ended up fighting with oil regulator Directorate General of Hydrocarbons (DGH) over the latter’s diktat to conduct the DSTs at their hydrocarbon finds in the KG basin, the government last came out with a policy change whereby the DST with a 50% cost recovery is optional. Sources said RIL might club its KG basin discoveries along with other satellite finds into an integrated field development plan. It would take at least two-three years for the firm and its partners to commence gas production from these discoveries. Gross production at KG-D6 averaged 11.5 mmsmcd during January-March 2015 against 11.8 mmscmd during October-December 2014. After commissioning two booster compressor pumps, RIL is trying to revive some wells to maintain the current production levels. In addition, after the completion of appraisal wells in MJ-1, reservoir modelling and engineering are under progress, say analysts. The KG-D6 fields started production in April 2009. During January-March 2015, RIL’s revenues from oil and gas segment dropped by 10.2% year-on-year to Rs 2,513 crore against Rs 2,798 crore in the same months the previous year. RIL, in a recent presentation to investors, said it had commissioned two onshore terminal booster compressor units (OTBC) in the fourth quarter of FY15. These are expected to extend the life of the wells/recovery from the wells and offers opportunity to revive ceased wells that were shut in due to high water influx.