Reliance,bpstart production at Satellite Cluster

Reliance Industries (RIL) and BP on Monday announced the start of production from the Satellite Cluster gas field, in block KGD6, ahead of schedule. The second of the three deepwater gas developments, planned jointly, was expected to start production in mid-2021.

RIL and BP have been developing R Cluster, Satellite Cluster and MJ in the KG-D6 block — which together are expected to produce around 30 mmscmd (1 billion cubic feet a day) of natural gas by 2023. It will meet up to 15 per cent of the country’s gas demand, said RIL in its exchange filing on Monday.

Despite Covid-19 challenges, the Satellite Cluster field has come onstream two months ahead of schedule, it said. The field is located about 60 km from the existing onshore terminal at Kakinada on the East Coast in water depths of up to 1,850 metres.

The fields will each utilise the existing hub infrastructure in the KG-D6 block, it said. RIL is the operator of the block with a 66.67 per cent participating interest, while BP holds 33.33 per cent. Meanwhile, brokerages said the exploration and production (E&P) segment accounts for just 2 per cent of consolidated FY23 earnings before interest, taxes, depreciation and ammortisation (Ebitda). Hence, it will not have much impact on the company’s valuations or the earnings per share (EPS).

The Satellite Cluster field will produce gas from four reservoirs, utilising a total of five wells and is expected to reach gas production of up to 6 mmscmd. The R Cluster and Satellite Cluster are expected to contribute to about 20 per cent of India’s current gas production.