Lok Sabha Question No. 373 (STARRED), answered on 2016-12-12
Subject: Natural Gas Production from KG Basin
Ministry: PETROLEUM AND NATURAL GAS
Asked by: MANSUKHBHAI DHANJIBHAI VASAVA, PRATAPRAO GANPATRAO JADHAV

## GOVERNMENT OF INDIA

## MINISTRY OF PETROLEUM AND NATURAL GAS

## LOK SABHA STARRED QUESTION NO. 373 TO BE ANSWERED ON 12 th  December, 2016

## Natural Gas Production from KG Basin

## *373. SHRI MANSUKHBHAI DHANJIBHAI VASAVA: SHRI PRATAPRAO JADHAV:

पैट्रोलियम व प्राक ृ लिक गैस मंत्री

Will  the  Minister  of  PETROLEUM  AND  NATURAL  GAS  be  pleased  to state:

- (a).      whether  natural  gas  production  from  the  Krishna  Godavari  (KG)  Basin  has declined during the last three years and the current year;
- (b).    if so, the details thereof along with the percentage of production in KG basin;
- (c).   whether the Government has ascertained the reasons and factors responsible for the said decline;
- (d).   if so, the details thereof along with action taken against those responsible and remedial measures taken/proposed to be taken by the Government in this regard; and
- (e).   the cost of the production of oil and gas in KG basin as compared to other oil and gas fields in the country?

## ANSWER

पेट्रोलियम और प्राक ृ लिक गैस मंत्रािय में राज्य मंत्री (स्विन्त्त्र प्रभार) (श्री धमेन्त्र प्रधान)

MINISTER  OF  STATE  (I/C)  IN  THE  MINISTRY  OF  PETROLEUM  &  NATURAL GAS (SHRI DHARAMENDRA PRADHAN)

- (a) to (e). A statement is laid on the Table of the House.

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## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  to  (e)  OF  THE  LOK  SABHA STARRED QUESTION NO. 373 BY SHRI MANSUKHBHAI DHANJIBHAI VASAVA AND SHRI  PRATAPRAO  JADHAV  TO  BE  ANSWERED  ON  12.12.2016  REGARDING NATURAL GAS PRODUCTION FROM KG BASIN

- (a) & (b). Natural gas production and its percentage contribution in domestic production in last three years i.e. from 2013-14 to 2015-16 and in current year from April-September, 2016 in Krishna-Godavari (KG) basin is as under:
- (c) & (d) . The main reasons for decline in natural gas production from KG basin are - water ingress and sand ingress in the wells, low flowing pressures and natural decline in Oil and Gas wells. The major decline  was observed in  KG-DWN-98/3 (KG-D6) block operated by M/s Reliance Industries Ltd. The gas production from D1 & D3 fields in this block is much less than the production rates approved in addendum to Initial Development Plan (AIDP). Government has issued notice for proportionate disallowance of cost of production facilities based  on  cumulative  shortfall  in  gas  production  vis-à-vis  AIDP  targets,  and  on  dated 03.06.2016, has disallowed an amount of US$  2.756 Billion from the cumulative development cost incurred by the Contractor as on 31 st March 2015. This disallowance was computed  based  on  the  cumulative  shortfall  in  production  of  gas  vis-a-vis  production estimates under the approved AIDP till 31.03.2015. The additional profit petroleum payable to the Government by the contractor for the period up to FY 2014-15 is about US$ 246.9 Million. In the context of the Government's order on disallowance, the contractor has invoked arbitration clause of Production Sharing Contract.
- (e). The production costs of companies vary from field to field depending upon size of the reservoir,  location,  logistics,  availability  of  surface  facilities  etc.  However,  the  cost  of production of oil and gas including levies in Krishna Godavari (KG) basin as compared to other oil and gas fields including levies is given below:

|                                      | 2013-14   | 2014-15   | 2015-16   | 2016-17 (April- Sept 2016)   |
|--------------------------------------|-----------|-----------|-----------|------------------------------|
| Gas Production (in MMSCM)            | 6775.56   | 5555.2    | 5165.22   | 2219.97                      |
| %contribution in domestic production | 19.18%    | 16.49%    | 16.12%    | 14.12%                       |

Note: MMSCM-Million Metric Standard Cubic Metre

|                                         | KG Basin      | Other Basins   |
|-----------------------------------------|---------------|----------------|
| Crude Oil Production Cost (US$/bbl)     | 19.99 - 44.82 | 17.29 - 39.89  |
| Natural Gas Production Cost (US$/mmbtu) | 4.99 - 7.30   | 3.80 - 6.59    |

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