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RIL’s gas output hits all-time low; shuts 6 wells

Dhirubhai-1 and 3 gas fields in the KG-D6 block, which started production in April 2009 at the rate of 30 mmscmd, saw output plummet to 28.16 mmscmd in the week ending 4th March, according to a status report filed by the company with the oil ministry

New Delhi: Reliance Industries’ (RIL) largest gas fields in its flagging KG-D6 block have hit an all-time low production of about 28 million metric standard cubic meters per day (mmscmd) as the firm shut six wells due to water and sand ingress, reports PTI.

Dhirubhai-1 and 3 gas fields in the eastern offshore KG-DWN-98/3 or KG-D6 block, which started production in April 2009 at the rate of 30 mmscmd, saw output plummet to 28.16 mmscmd in the week ending 4th March, according to a status report filed by the company with the oil ministry here.

Together with 6.46 mmscmd of gas production from MA oil field in the same area, KG-D6 block output between 27th February and 4th March averaged 34.62 mmscmd.

The KG-D6 production is lower than 61.5 mmscmd rate achieved in March 2010, as a drop in pressure in the wells and increased water ingress has led to a lower per-well gas output.

The report said that of the 18 wells drilled, completed and put on production in the D1 and D3 fields, six wells had to be shut or closed due to high water cut/sanding issues.

The output from KG-D6 is short of the 70.39 mmscmd-level (61.88 mmscmd from D1 and D3 and 8.5 mmscmd from the MA field) envisaged by now as per the field development plan approved in 2006.

While Reliance holds 60% interest in KG-D6, UK’s BP Plc holds 30% and Niko Resources of Canada the remaining 10%.

The MA oilfield currently produces about 11,335 barrels of crude oil per day. In addition, 1,680 barrels of condensate are produced from the field every day.

The report said 14.80 mmscmd of the gas output is being sold to fertiliser plants and 16.62 mmscmd to power plants.

The remaining 3.20 mmscmd is consumed by other sectors, including those fed by the East-West pipeline that transports gas from the east coast to consumption centres in the west.

RIL projected output of 34.5 mmscmd of gas during March.

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Govt aims to raise Rs1.5 trillion via asset sale, dividends

The government is looking to raise Rs30,000 crore through part-sale of its stake in various public sector companies. Additionally, over Rs27,000 crore is expected to come through dividend payments from PSUs.

The government aims to tap various assets to raise an estimated Rs1.52 trillion in the next financial year, nearly half of which could come from telecom spectrum sale and disinvestment in public sector undertakings (PSUs).

The targeted proceeds of Rs1,51,717 crore from the government’s physical and capital assets would account for more than one-tenth of its revenue receipts in 2012-13.

This would be much higher than the amount garnered by levying even an increased service tax of 12% during the year. According to the Budget estimates for 2012-13, the government is looking to raise Rs30,000 crore through part-sale of its stake in various public sector companies. Additionally, over Rs27,000 crore is expected to come through dividend payments from PSUs. It is also expecting nearly Rs23,000 crore in form of dividend from RBI and various nationalised banks and financial institutions, taking its total dividend estimate for 2012-13 to over Rs50,000 crore.

Besides, the government is looking at proceeds of over Rs58,000 crore from its various telecom assets, including Rs40,000 crore from sale of spectrum next year. From its energy assets also, the government is targeting funds worth over Rs13,300 crore, most of which would come in form of royalty on offshore petroleum assets.

In its Budget for 2012-13, the government has estimated total receipts of nearly Rs14.9 trillion, out of which about Rs7.7 trillion would come from tax revenues, close to Rs1.64 trillion from non-tax revenues and about Rs5.55 trillion as capital receipts. The disinvestment proceeds are part of capital receipts, while gains from spectrum sale and other asset-related revenue realisation are part of non-tax revenues.

The projected tax revenues include about Rs3.73 trillion as corporate tax, Rs1.95 trillion as income tax and Rs1.24 trillion service taxes, among others. In this year’s Budget, the government has proposed to hike the service tax from 10% to 12%. For the current financial ending this month, the government had estimated non-tax revenue worth Rs13,000 crore and Rs1,600 crore from auction of telecommunication spectrum and FM phase III, respectively.

While these auctions did not materialise this year, the government managed higher-than-estimated receipts in form of dividend from PSUs. In addition to Rs40,000 crore from spectrum sale next year, the government is targeting more than Rs18,200 crore of revenue from other communication services as well in 2012-13.

This would include licence fees from telecom operators, receipts on account of spectrum usage charges and auction of Broadband Wireless Access (BWA) spectrum currently in use by Central PSUs, receipts from spectrum held in excess of 6.2 MHz and receipts from auction of spectrum, including spectrum to be vacated by 122 licences, in view of a Supreme Court order.

In 2011-12, the government had also targeted Rs40,000 crore as disinvestment proceeds, but could manage only about Rs13,895 crore from part-sale of stake in PSUs.

For the next fiscal, the government is targeting Rs30,000 crore from disinvestment, while another Rs25,000 crore could be realised in the fiscal 2013-14. The government has said that the dividend receipts from PSUs could also be higher next fiscal, as economy is projected to grow at higher rate.

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