UPDATE 1-India's Reliance cuts gas reserves estimate -govt

Thu Nov 1, 2012 12:43pm EDT
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* Reliance cuts capex to $6.2 billion from $8.8 billion

* Gas output falls to 20.5 mmscmd from 67 mmscmd in 2009-10

By Nidhi Verma

NEW DELHI, Nov 1 (Reuters) - Reliance Industries Ltd has cut its estimate of gas reserves in the D6 block off India's east coast by about two-thirds to 3.4 trillion cubic feet (tcf), the oil ministry said, hurting plans for the country to reduce its gas imports.

The D6 block in Krishna Godavari (KG) basin, jointly operated by Reliance and BP Plc, was expected to contribute up to a quarter of the gas supply for Asia's third-largest economy.

But output from KG fields has declined, leaving India more dependent on expensive liquefied natural gas (LNG) imports. Development of the field has been beset by arguments over spending and the strategy for tapping its complex geology.

Reliance's latest revision compares with its December 2006 estimate of 10.3 tcf of reserves and brings the figure back closer to the November 2004 estimate of 3.81 tcf, the ministry said on Thursday.

The company also has revised its capital spending plan from $8.8i billion in 2006 and $2.4 billion in 2004, it said.

"They have again submitted a revised Field Development Plan in September 2012 bringing back the reserves at 3.4 tcf and capex to $6.2 billion. This is being examined critically by DGH (Directorate General of Hydrocarbons)," the ministry statement said.   Continued...