Reliance Posts 2.9% Fall in Oil, Gas Revenue to $460.2M in 3Q FY 2015

India's Reliance Industries Ltd.'s oil and gas exploration and production segment posted a 2.9 percent decline in revenue for the third quarter 2015 (3Q FY 15) that ended in Dec. 31, 2014 to $460.2 million (INR 28.41 billion), compared to $474 million (IDR 29.26 billion) a year ago, the company reported Friday.

"The quarter was characterized by fall in crude prices, which fell by around 40 percent through the quarter. Continuous non-OPEC crude oil production growth, led by U.S., partial return of Libyan barrels, muted oil demand growth resulted in an oversupplied crude market leading to a sharp decline in crude oil prices," the firm commented on the company's performance.

The firm's KG-D6 field off India's east coast produced 0.5 million barrels of crude oil, 0.1 million barrels of condensate and 38.5 billion cubic feet (Bcf) in 3Q FY15. The fall in KG-D6 gas production is largely due to a natural decline in the fields although this was partially offset by incremental production from new well MA08 and side track in well MA6H which was implemented in 2H FY14.

In an update on key KG-D6 projects, Reliance said it is appraising the D55 discovery, with drilling of the third appraisal well MJ-A3, which encountered hydrocarbon at the zone of interest, completed in 3Q FY15. Actual hydrocarbon zone encountered was thinner than expected and impact analysis on overall resources is currently underway.

Turning to the MA/D1-D3 Enhanced Gas Recovery activities, Reliance is currently drilling a side track well in MA5H. All the construction work related to booster compressor at the onshore terminal has been completed and 2 compressors are likely to be commissioned in 4Q FY15, while the third compressor is expected to be commissioned by mid-2015.

Over in the Panna Mukta and Tapti development, Reliance reported that the Panna-Mukta fields produced 1.8 million barrels of crude oil in 3Q FY 2015, down 12 percent year-on-year (Y-o-Y) but natural gas production grew 8 percent in the corresponding period to 18.5 Bcf. The higher gas production resulted from infrastructure modification, which facilitated processing of more gas, and the revival of shut-in wells as well as improved performance from new wells including infills drilled during 2H FY14.

Tapti fields produced 0.05 million barrels of oil and 3.0 Bcf of natural gas in 3Q FY15, down 29 percent and 53 percent respectively on Y-o-Y basis. The cessation of production from this block is likely to occur in early FY16.


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