MUMBAI Jan 9 India's Reliance Industries, which
operates the Krishna-Godavari basin's D6 block off India's east
coast, has started producing gas from the MA-8 well on Jan. 1,
its spokesman said on Thursday.
The well has potential to produce 1 million to 2 million
standard cubic metres per day (mscmd) of gas from the well and
the output is expected to stabilise by the middle of the month,
the Reliance official said.
Reliance is currently producing about 10 mscmd gas from the
KG D6 block, sharply lower from the 60 mscmd production at the
end of 2010. Reliance and partner BP have cited
geological complexities for the fall in output but the oil
regulator believes they have failed to drill enough wells.
Falling output had already prompted the government to
disallow proportionate cost recovery to Reliance, leading to
arbitration proceedings over the issue.
Last month, India allowed Reliance to charge higher prices
for gas from April only after the company offered financial
guarantees to the government to settle any claims against it
over a shortfall in its gas output.