New Delhi, Oct 18 (IANS): The Reliance Industries (RIL) consortium, including British oil giant BP, plans to invest between $8 billion and $10 billion by 2016-17 in further development of the KG-D6 gas block, Petroleum Minister M. Veerappa Moily said Friday.

"RIL (consortium) has already invested 12 billion US dollars in the D-6 block and will be investing another 8 to 10 billion US dollars," Moily told mediapersons here.

Natural gas output from the block has declined to 14 million standard cubic metres per day from 60 mmscmd at the end of 2010.

Without specifying, the petroleum minister further said that almost all issues, except one concerning the RIL consortium's operating of the KG-D6, had been sorted out.

The Directorate General of Hydrocarbons (DGH) has blamed RIL's failure to drill enough wells for the fall in gas output to 10 mmscmd from the D1 and D3 fields in KG-D6 block, instead of rising to the planned 80 mmscmd. It wants a penalty of $1.786 billion to be levied on RIL on this count.

The consortium has cited geological complexities for the fall in output.

Oil ministry sources told IANS that the issue remaining to be sorted out is whether RIL's production shortfall could be penalised by denying it the benefit of gas price revision on expiry of the current $4.2 per million British thermal unit rate in April 2014.

Moily had earlier this month indicated that the government may appoint an international expert to ascertain the reasons for the sharp fall in natural gas production at RIL's KG-D6 fields.