Reliance in talks with PSU oil refiners to sell D6 crude
12 Aug 2008
Mumbai: Reliance Industries is in advanced talks with state-run refiners - Hindustan Petroleum Corp, Chennai Refinery and Kochi Refineries - for sale of of crude oil from its eastern offshore KG-D6 block.
The company will start pumping around 34,000 barrels per day of oil from its KG-D6 block on the Krishna Godavari basin from September.
Reliance said it does not intend to use the D6 oil in its Jamnagar refinery and are close to tying up crude sales with state refiners.
The KG-D6 block has an estimated 53.5 million barrels of oil reserve and production will last 11 years - beginning with 20,000 bpd in first year and rising to 30,000 bpd in second year before beginning to decline. The company is investing $2.234 billion in developing the MA-1 and MA-2 oil fields in the gas-rich block.
The Aker Smart-1 floating production storage and offloading system (FPSO) is expected on the field any day and it may take 4-6 weeks to install it and start oil production.
The $733 million FPSO will help eliminate the need for piping the oil to the shore for onward transportation to refineries. Oil tankers can directly load at the FPSO and carry the oil to the destined refineries.
Reliance is also investing $5.2 billion for the first phase of its gas field development plan. Gas output is expected around the same time as oil.