<div>Reliance Industries and its partner BP have shut a seventh well in the D6 block off the country's east coast due to sand and water ingress, bringing down the number of producing wells to 11, a source with direct knowledge of the matter said.<br /><br />The well at D1 and D3 gas fields was shut about a week ago, the source said on Friday.<br /><br />Declining gas output from the D6 block in the Krishna Godavari basin has impacted expansion plans of several power companies, and spurred demand for costly liquefied natural gas imports.<br /><br />Gas production from D6 has declined to about 23 million standard cubic metres a day (mmscmd), the source said.<br /><br />A Reliance spokesman declined to comment on the matter.<br /><br />Production at the block may average 22.6 mmscmd in the fiscal year starting April 2013 and is projected to decline to 20 mmscmd in 2014/15, only about a third of the 60 mmscmd it produced in 2010 and well below the planned peak capacity of 80 mmscmd.<br /><br />Reliance may have to shut under-performing gas fields in 2015-16, oil secretary G.C. Chaturvedi said in October, while Morgan Stanley analysts have said the key gas producing fields in D6 could be exhausted in 5 years.<br /><br />Reliance brought in the British oil and gas company last year, which paid $7.2 billion to invest in 23 oil and gas blocks with the Indian firm, hoping its offshore expertise would help arrest the decline in output.<br /><br />The D6 block, operated by Reliance, was expected to contribute up to a quarter of the gas supply for Asia's third-largest economy.<br /><br />Reliance and BP submitted a revised field development plan in September, cutting the gas reserves in the D6 block by about two-thirds to 3.4 trillion cubic feet, the oil ministry said last month.<br /><br />Reliance had government approval to drill 50 wells and had drilled only 22 with 4 turning out to be dry, the source said.<br /><br />Canadian company Niko Resources owns 10 per cent interest in the block, while Reliance holds 60 per cent and BP the rest.<br /><br /><br />(Reuters)</div>
