MUMBAI, Jan 9 (Reuters) - India's Reliance Industries, whichoperates the Krishna-Godavari basin's D6 block off India's eastcoast, has started producing gas from the MA-8 well on Jan. 1,its spokesman said on Thursday.
The well has potential to produce 1 million to 2 millionstandard cubic metres per day (mscmd) of gas from the well andthe output is expected to stabilise by the middle of the month,the Reliance official said.
Reliance is currently producing about 10 mscmd gas from theKG D6 block, sharply lower from the 60 mscmd production at theend of 2010. Reliance and partner BP have citedgeological complexities for the fall in output but the oilregulator believes they have failed to drill enough wells.
Falling output had already prompted the government todisallow proportionate cost recovery to Reliance, leading toarbitration proceedings over the issue.
Last month, India allowed Reliance to charge higher pricesfor gas from April only after the company offered financialguarantees to the government to settle any claims against itover a shortfall in its gas output.