Krishna Godavari Basin

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Krishna-Godavari Basin (Telugu: కృష్ణా-గోదావరి బేసిన్) is a peri-cratonic passive margin basin in India. It is spread across more than 50,000 square kilometres[1] in the Krishna River and Godavari River basins in Andhra Pradesh. The site is known for the D-6 block where Reliance Industries discovered the biggest natural gas reserves in India in 2002.[2]

Discoveries

The first gas discovery in the basin was in 1983, in Rajole Well No 1, when ONGC had a small office in Rajahmundry and Narsapur. Since that discovery Reliance and others have joined the exploration effort.

  • 0.4 trillion cubic metre (14 trillion cubic feet) of gas by Reliance Industries in KG-DWN-98/l (KG-D6) in 2006.[3] 1,800 metre (6,000 feet) below the sea floor.[2]
  • 20 trillion cubic feet (5.7×1011 m3) of gas by Gujarat State Petroleum Corporation in June 2005.[4]
  • Potentially 20 trillion cubic feet (5.7×1011 m3) of gas in place at D-3 and D-9 blocks, as estimated in May 2011. According to Reliance Industries: "This includes identified prospects and leads and a number of postulated prospects based on the play area and field size distribution."[5]
  • A gas discovery by ONGC in June 2009, which an anonymous company official said could have an estimated 10 trillion cubic feet (2.8×1011 m3).[6]

Tight oil & gas reserves

KG inland and offshore basins have good prospects of tight oil and tight gas reserves from the conducted field studies.[7] Most of the conventional wells drilled and operated have shorter life span than envisaged life and with erratic production. This may be due to drilling of conventional wells in tight oil / gas fields without horizontal drilling in the shale rock formations and hydraulic fracturing.

Ecology

The basin is home to Olive Ridley turtles, a Vulnerable species [8]

Projects

KG-DWN-98/1 (KG-D6) - 8100 km2. The total project is expected to cost $100 billion.[9] 50 km off the coast of Kakinada.[10]

CAG Audit

The Reliance Industries Limited (RIL) was supposed to relinquish 25% of the total area outside the discoveries in 2004 and 2005, as per the Production Sharing Contract (PSC). However, the entire block was declared as a discovery area and RIL was allowed to retain it. In 2011, the Comptroller and Auditor General of India (CAG) criticised the Oil Ministry for this decision. The CAG also faulted RIL for limiting the competition in contracts, stating that RIL awarded a $1.1 billion contract to Aker on a single-bid basis.[11][12]

In May 2014, ONGC alleged that Reliance was illegally extracting gas from blocks owned by ONGC in Krishna Godavari Basin.[13]

Gas pricing

Recently, Indian government fixed the natural gas price at producer end (on shore point) as 5.61 US$ per mmbtu on net calorific value (NCV) basis compared to earlier price of 4.2 US$ per mmbtu on gross calorific value basis.[14] However the enhanced price would be applicable only after compensating the shortfall gas in the previous years for the KG basin fields which are under exploration and production contract by Reliance Industries Ltd. The earlier price of 4.2 US$ per mmbtu on gross calorific value (GCV) basis is calculated already at maximum price cap of Brent crude (US$60/bbl) under the applicable formula linking the price of gas per mmbtu (GP) to the price of oil:

GP = 2.5 + (OP – 25) ^0.15

where OP is the annual average Brent crude price for the previous FY, with a cap of USD 60/bbl and a floor of USD 25/bbl.[15] As the annual Brent price has always been above US$60 since 2007, the revised gas price at 5.61 US$ during the year 2014 is in excess of the applicable price by nearly 20%.

See also

References

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  2. ↑ 2.0 2.1 Lua error in package.lua at line 80: module 'strict' not found.
  3. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  4. ↑ Lua error in package.lua at line 80: module 'strict' not found.(subscription required)
  5. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  6. ↑ ONGC scores hat-trick on gas discoveries
  7. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  8. ↑ Oil cos stumble on Olive Ridley ground
  9. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  10. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  11. ↑ CAG flays Oil Min for allowing RIL to retain D6 area
  12. ↑ Reliance violated contract terms in KG Basin, finds CAG report
  13. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  14. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  15. ↑ Lua error in package.lua at line 80: module 'strict' not found.

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