Reliance to invest $5.2 billion in KG-D6, double gas output
01 Nov 2006
Mumbai: Reliance Industries Ltd (RIL) will invest $5.2 million in the D-6 block of the Krishna Godaveri basin to double gas output to 80 million standard cubic meters per day (mmscmd) as against the current 40 mmscmd.
RIL had proposed investments of $2.47 billion for 7-1/2 years in Dhirubhai 1 and 3 (in the D6 block) out of a total 34 wells.
RIL also filed an amendment to the initial development plan for the deepwater block KG-DWN-98/3 (referred to as KG-D6), with the director-general of hydrocarbon (DGH) for approval.
The deepwater block KG-DWN-98/3 in the Krishna-Godavari basin off the east coast of India in the Bay of Bengal was awarded to Reliance and NIKO Resources, Calgary, Canada (NIKO) under NELP-1 bidding round.
RIL, as operator of the block, holds 90 per cent of the participating interest and NIKO the remaining 10 per cent. The block covers an area of 7,645 sq km and its north-western boundary is about 40-60 km southeast of Kakinada in Andhra Pradesh. Water depth in the block ranges up to 2,700 m. RIL made the world's largest gas discovery in 2002 in this block.
Based on the initial reserve estimates of the block, RIL prepared an initial development plan for developing two discoveries - Dhirubhai 1 and Dhirubhai 3 - in the block. The initial development plan envisaged production plateau of 40 mmscmd.
RIL has also obtained independent assessment for the Dhirubhai-1 and Dhirubhai-3 gas discoveries at 11.3 TCF which is almost double of the earlier estimates. In view of the significantly higher hydrocarbon potential and large projected deficit of gas demand, RIL has sought approval for increase in production rate from 40 mmscmd to 80 mmscmd; enhanced facilities for production, collection, evacuation and handling of gas, both onshore and offshore.
RIL is planning to raise $2 billion (about Rs9,000 crore) for oil and gas exploration and production.
RIL board is meeting on November 9 for approving a proposal to raise funds by way of foreign currency convertible bonds, syndicated loan or fixed or floating bonds.
The funds raised would be used in oil and gas exploration and production projects, the Mukesh Ambani-controlled RIL informed the Bombay Stock Exchange.
