Average gas production from the Reliance Industries Limited (RIL) operated Krishna-Godavari (KG) Basin has fallen short of the expected volume. Giving this information in a written reply to the Rajya Sabha, Minister of Petroleum and Natural Gas Dr. M. Veerappa Moily said the average gas production from KG-D6 block during April to October, 2012 was about 30 Million Standard Cubic Meter Per Day (MMSCMD) as against 86.73 MMSCMD approved in the Field Development
Plans.

This is mainly due to water loading and sand ingress in well bores and substantial variance in reservoir behaviour. The Minister said the government has not accepted the RIL's explanation and have ordered proportionate disallowance of cost of production facilities amounting to over one billion dollars. RIL initiated arbitration and the government has also appointed an arbitrator in the matter.

In a separate reply Minister of State for Petroleum and Natural Gas Panabaaaka Lakshmi said the CAG has been asked to undertake audit of KG-D6 oilfield. CAG has been asked to carry out audit of four blocks including KG-DWN-83/3 for the years 2008-09 to 2011-12.