Reliance Industries’ Plan to Develop Satellites Approved

The upstream regulator has cleared Reliance Industries' $1.53 billion plan to develop four satellite fields to boost output at its D6 block and sent it for final government approval, an official source said on Wednesday.

The management committee has approved the investment plan of Reliance Industries for its D6 gas block, the source at the Directorate General of Hydrocarbons told Reuters.

A Reliance Industries spokesman declined immediate comment.

Earlier two newspapers had reported the government had approved the investment by Reliance.

The investment plan, which will help boost falling output of the gas field in the Krishna Godavari KG.L basin, has been pending with the authorities for two years, the Times of India and the Mint said, citing news agency Press Trust of India.

The four satellite fields, off India's east coast, can produce 10 million cubic metres of gas per day by 2016, which will help shore up output from the D6 block that has seen output fall a third since 2010.

Gas output had declined as Reliance drilled fewer wells than planned and six wells have ceased to produce due to the entry of sand or water, the government said last month.

Reliance drilled 22 wells at D1 and D3 gas fields in the block, four of which are yet to go into production, against 31 producing wells approved for drilling up to March 2012 in the field development plan FDP.L.

But the company last year tied up with BP (BP.L) to further develop the D6 block, and the British firm has said production from the field could rise from 2014 with the help of the satellite fields.

Reliance's shares fell 35 percent in 2011, underperforming the broader index, on investor worries about declining output at the key gas field.