Rabi Narayan Bastia, head of exploration at Reliance Industries Ltd (RIL), has quit the company without assigning any reason.
The sudden resignation has sent a buzz of speculation through the small
cloister of petroleum industry mavens because Bastia is the geologist
who has been credited with identifying the 'huge' potential reserves of
the D6 field in the Krishna Godavari basin.
The obvious question: did his resignation have anything to do with the
recent troubles that have enveloped the field just over a year ago after
gas output started to dip to alarming levels?
Bastia
is a distinguished geologist with an impressive track record. He holds a
PhD in structural geology from IIT Kharagpur and is a pretty well-known
figure in the world’s geo-scientific academia.
D6 was billed as the biggest gas discovery in the world in 2002. It was
projected to produce 80 mmscmd of gas in 2011-12. When production soared
to 60 mmscmd in July 2009, it was a rah-rah moment for Reliance – and
it was reckoned to be well on course to attain a peak production of 80
mmscmd. But things started to go wrong soon after and gas production
plummeted. Output is now slated to fall to 20 mmscmd in 2014-15.
In
short, KG-D6 has all the makings of a colossal disaster. A couple of
months ago we irreverently compared the disaster in the Bay of Bengal
with John F. Kennedy’s notorious Bay of Pigs disaster. We didn’t know
then the magnitude of the disaster and were unaware that what we had
said in jest had a sickening ring of truth.
A number of reasons have been attributed for the KG-D6 debacle (click column policy to read D6 Imbroglio: Take The Nation Into Confidence).
We started our investigation into the D6 catastrophe sometime ago and
our report quoted BP – which was roped in as RIL’s strategic partner
last year – as saying that the D1, D3 fields did not hold the sort of
prospects that it was touted to possess.
We delved a little deeper and we now have a fair idea of what went
wrong. But we do not consider ourselves competent to sit in judgment on
the issue and would not like to indulge in loose prattle. We are just
doing our professional duty of probing an issue that is of tremendous
national importance.
Our
inquiries reveal that as chief of exploration, Bastia will have to own
up responsibility for the D6 disaster. Bastia cannot be blamed for
either the complexities or unpredictability of the KG basin. That is
Nature’s creation. The question is: did Bastia go wrong in evaluating
the reserves of the D6 block?
Experts acknowledge that the definitions of reserves and associated
guidelines cannot address all possible scenarios. Nor can they remove
the conditions of uncertainty that are inherent in all reserves
estimates. It is the responsibility of the reserves evaluator to
exercise sound professional judgement and apply these guidelines
appropriately and objectively.
Bastia
does not seem to have done that. He is considered a genuine
professional incapable of perpetuating such a fraud. The question is:
Where did he falter?
It appears that some geological parameters that determine how much
hydrocarbons the sub-surface holds have only been studied over a small
area and the data has been extrapolated to cover the entire area. The
study was confined to a pilot area. The assumption was that the same
geological parameters would exist in the rest of the field, which was
not true. Why was this extrapolation permitted?
US multinationals sell mathematical modelling software that just takes
data from one well and applies it to a vast area based purely on
statistical theory rather than predicated on the actual geology of the
area.
Using data drawn from just a few wells, the software can draw up a model
showing the rock formations that lie deep below even though the facts
may not corroborate the theoretical model. The well log data itself is
an indirect measurement of geological parameters that decide the
accumulation of hydrocarbons.
For example, there is the Gamma Ray measurement which is determined by
using a probe. If the gamma ray is lower, it is assumed that the rocks
such as limestone and sand stone exist which are likely candidates for
holding hydrocarbons. The process called inversion is to use all these
indirect parameters to recreate what the Earth looks like deep below and
where it holds eagerly sought hydrocarbons. The modelling based on
mathematical software is designed to trim costs and cut the time to
determine reserves for exploration. But the downside risk is that the
compulsions of time and money can result in blunders.
But not many are aware of what the software actually does and for
convenience-sake rely on it which results in blunders like D6.
The Russian petrophysicists are aware of the pitfalls of the software
and, hence, do not use it to draw a model of the sub surface. Not many
geoscientists know how these mathematical tools work. For example, wrong
conclusions can be drawn by certain log indirect measurements which
overestimate the pore volumes and lead to bloated reserves.
Rabi Bastia appears to have relied too much on these western
mathematical software. There is understood to be a massive variance in
the reserve estimates in D6 now that the model has been rebuilt on the
basis of actual observed parameters.
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