The Directorate General of Hydrocarbons has already sent a fact-finding mission to KG-D6 fields to ascertain reasons for the decline in production. The three-member team lead by Gautam Sinha, head of production at DGH, will review well-wise production and reservoir performance of KG-D6 fields
New Delhi: Going into an overdrive, the government has called an official meeting next week to review the reasons for the fall in production at Reliance Industries’ (RIL) KG-D6 fields, and has ordered the company to stop natural gas sales to non-priority users like Essar Steel, reports PTI.
A meeting of the management committee that overseas the operations of the KG-D6 fields has been called next week to “ascertain reasons” for RIL not meeting its drilling commitment and the drop in production, oil secretary S Sundareshan told reporters here.
Reliance had in 2006 won government nod to invest $8.836 billion in Dhirubhai-1 and 3 fields in the KG-D6 block after promising an output of 61.88 million metric standard cubic meters a day (mmscmd) from 22 wells by April 2011 and 80 mmscmd from 31 wells by 2012.
But the situation on the ground has been markedly different with Reliance only producing about 42 mmscmd from 18 wells drilled so far on D1 and D3 fields in the Bay of Bengal block. Another 8 mmscmd is produced from MA oilfield in the same block.
“A formal meeting has been called next week in which representatives of the oil ministry, the Directorate General of Hydrocarbons (DGH) and the contractor (Reliance) will be present,” he said.
“After ascertaining the reasons, we will take appropriate measures.”
“These are fields which have come into production after monumental effort... we do not come to abrupt judgements on these matters,” he said when asked if the government was contemplating levying any penalty.
“It is difficult at this juncture to comment on why production has fallen (and) it is too premature to talk of action,” he said.
Mr Sundareshan did not elaborate on the “measures” the oil ministry would take, but sources said the Production Sharing Contract (PSC) does not provide for levying of any financial penalty on a firm not meeting its drilling commitment during production stage.
The PSC provides for levy of liquidated damages only in case a company does not meet the commitment it had made for getting the block. Penalty is levied for the part of the minimum work programme (MWP), committed at the time of bidding for the block, that is not completed.
KG-D6 wells have over the past one year shown increased water production and some of them are on the verge of ceasing. Also, there has been fall in pressure at the wells.
Mr Sundareshan said Reliance has been asked to immediately stop natural gas sales to Essar Steel, Welspsun Maxteel, Ispat Industries and petrochemical and refineries so that full demand of core sectors of fertiliser and power is met.
“There is no question of any contractor not abiding by government instructions,” he said adding Reliance would abide by the ministry orders within days.
Of the 57.17 mmscmd of gas for which contracts have been signed, 9.57 mmscmd has been cornered by steel, petrochemical and refineries sector.
Essar Steel draws 3.2 mmscmd, Welspun Maxteel 0.40 mmscmd and Ispat 0.59 mmscmd. Besides, Reliance’s petrochemical plant gets 1.17 mmscmd and a sizeable 4.21 mmscmd goes to refineries including the Jamnagar units of Reliance.
Mr Sundareshan said the government had initially allocated 40 mmscmd of gas only to fertiliser, power, LPG extraction units and city gas distribution firms.
When output went up, additional users in steel, refineries and petrochemical sectors were added.
And now when the output has fallen to around 50 mmscmd, it is natural for the government to go back to allocation made to the priority sector, he added.
Oil regulator DGH has already sent a fact-finding mission to KG-D6 fields to ascertain reasons for the decline in production.
The three-member team lead by Gautam Sinha, head of production at DGH, will review well-wise production and reservoir performance of KG-D6 fields.
Reliance says output has dipped after touching 61.5 mmscmd achieved in March last year due to falling pressure at wells and that drilling more wells will not solve the problem as it will tap the same resource.
The regulator wants Reliance to drill 11 wells this fiscal, including two wells that were to be drilled last year.
Reliance holds 90% interest in the block KG-D6, where 18 gas and one oil discovery has been made. D1 and D3 gas and MA oil finds have so far been put into production. Niko has the remaining 10% in the block.
DGH has refused to approve investment budget for KG-D6 unless Reliance agrees to drilling the 11 committed wells even as the latter has projected that output from D1 and D3 fields will fall to 38 mmscmd from current 42 mmscmd in 2012-13.
As per the approved Field Development Plan (FDP), production in the block was to go up to 86.92 mmscmd in 2013-14 and decline in output is to set in from 2018-19. The field is expected to produce gas for a total of 13 years, i.e. till 2022.
D1 and D3 have seen output fall from 54 mmscmd achieved in March 2010 to 42-43 mmscmd at present. The MA oilfield in the same block is producing about 8 mmscmd of associated gas. Together, the current output from KG-D6 stands at 50 mmscmd.
The chief minister’s words came after the meeting, attended by his sons MK Alagiri and MK Stalin and grand nephew Dayanidhi Maran, which adopted a resolution on the 2G issue saying the party would face it legally
Chennai: Solidly backing his daughter Ms Kanimozhi, named in the Central Bureau of Investigation (CBI) charge-sheet in the second generation (2G) spectrum scam, an emotional DMK chief M Karunanidhi today said her growth in the party had nothing to do with the ‘daughter tag’ and only he was aware of what ‘she is going through now’, reports PTI.
“I view Ms Kanimozhi as a party worker. None should consider that she grew (in the party) just because she is my daughter,” the veteran politician told the DMK high-level committee meeting, convened to discuss the party’s strategy following ms Kanimozhi’s inclusion in the charge-sheet.
The chief minister’s words came after the meeting, attended by his sons Union minister MK Alagiri and deputy chief minister MK Stalin and grand nephew Dayanidhi Maran, adopted a resolution on the 2G issue, saying the party would face it legally, a DMK statement said.
“Today she was hesitant to come to this meeting since hundreds of media persons were waiting outside her residence to ask many questions. Therefore, I myself went and brought her here. I am not doing this to save my daughter but to save the party’s image,” the 87-year-old party patriarch said.
“Only I am aware of what Ms Kanimozhi, her mother (Ms Rajathi) and others in the house are going through. I haven’t been to the CIT Colony residence for the past three days,’ Mr Karunanidhi said.
He was explaining this to convey that he would not make an issue of his grievances and “pawn” the party in the process.
Recalling Ms Kanimozhi’s association with various social groups, he said she had organised recruitment drives across the state in coordination with district collectors, which has benefited 1.33 lakh persons.
“She works to serve. And that is why, with the intention of popularising folk arts, she had been organising Chennai Sangamam (cultural festival) in the city which has brought her so many laurels. Those who are jealous of this are opposing her,” he charged.
The CBI in its charge-sheet filed in a Delhi court had accused Ms Kanimozhi of entering into a criminal conspiracy with prime accused, former telecom minister A Raja, besides charging her under the Prevention of Corruption Act for taking illegal gratification through Kalaignar TV.
Transfer of 3,000 employees involved in Symbian software activities may be a signal of the end of the OS that has been associated with Nokia for ages. Rival Apple's iOS and Google's Android have taken an unbeatable lead in smartphones and software, and Nokia is trying to regain market share with its new partner, Microsoft and Windows Phone 7
Nokia, the largest handset seller in the world, today said it would cut its global workforce by around 4,000 employees by the end of 2012, with the majority of reductions in Denmark, Finland and the United Kingdom. In addition, the company has entered a strategic collaboration, which would result in the transfer of its Symbian software activities, together with about 3,000 employees, to Accenture.
Stephen Elop, president and chief executive, Nokia, said, “At Nokia, we have new clarity around our path forward, which is focused on our leadership across smart devices, mobile phones and future disruptions. However, with this new focus, we also will face reductions in our workforce. This is a difficult reality and we are working closely with our employees and partners to identify long-term re-employment programs for the talented people of Nokia.”
In accordance with country-by-country legal requirements, discussions with employee representatives started today. Nokia also plans to consolidate the company’s research and product development sites so that each site has a clear role and mission. Nokia expects the expansion of some sites and the contraction or closure of others, the company said in a statement.
All employees affected by the reduction plans can stay on the Nokia payroll through the end of 2011. Nokia said it expects personnel reductions to occur in phases until the end of 2012, linked to the rollout of the company's planned product and services portfolio. During this period, the mobile handset producer said it intends to ramp up its capacity for the development of Nokia smartphones based on the Windows Phone platform, the company's broad range of mobile phones and its services portfolio.
Nokia, which has been using Symbian as the preferred operating system (OS), has seen its market share falling, especially after the launch of Apple iPhone in 2007 and the subsequent arrival of Google's Android OS. Nokia sold 24.2 million smartphones in the first quarter of 2011, up 13% on a year-on-year basis, but 14% down quarter-on-quarter. During the first quarter Nokia's total mobile device volumes increased marginally to 108.5 million units from 107.8 million units in the corresponding period a year ago.
Although Nokia is still the world’s largest mobile device maker, its market share, especially in the smartphone category has been falling over the years. While the world was going gaga over the Apple iPhone and iOS, and Google's Android OS, Nokia preferred to stick with its tried and tested Symbian OS. Unfortunately, in the competitive environment of smartphones, Symbian proved to be a non-performer.
Many experts have opined that Symbian was never the competitor to the mighty iOS and Android-based devices. No doubt, Symbian as a basic OS for a mobile device is very user friendly, but when it comes to an OS for a smartphone, it just could not meet the expectations of running multi-task applications.
According to a report published by Appcelerator-International Data Corporation (IDC), the developer momentum around the world is shifting back toward Apple, as fragmentation and tepid interest in current Android tablets chip away at Google's recent momentum gains. Partly as a result of Microsoft's partnership announcement with Nokia, the Windows Phone 7 interest fell four points below BlackBerry, making Microsoft the new number three in developer interest behind Apple and Google.
After the agreement between Nokia and Microsoft, it was expected that Symbian would be left to die a natural death. Instead, Nokia has given it an extension with the transfer to Accenture.