KGBasin

India recorded the highest rise in natural gas output worldwide in 2009 after Reliance Industries’ eastern offshore KG-D6 field came into production, Economist Christof Ruhl said.

Mukesh Ambani-run RIL began gas production from the Krishna-Godavari basin in April, 2009, and its 60 million standard cubic metres per day output led to a 75 per cent jump in natural gas availability in the country to 140 mmscmd.

“Last year, India had the highest increase in production of natural gas worldwide. And I just checked, it also had the highest corresponding increase in consumption in natural gas worldwide,” BP Plc Group Chief Economist Christof Ruhl said. The jump in natural gas production in India was possible because the government allowed private sector firms to take a lead in exploration for hydrocarbons.

“When you look at countries where gas production is heavily government-controlled, like Russia, they had the biggest decline in gas production and consumption,” he said. “When you look at countries where new technologies have been developed like unconventional shale gas in the US… it was because they have an investment environment which is very competitive,” he said. Shale gas, trapped in sedimentary rocks, is said to hold the potential of doubling gas output in US.

Ruhl said that it was very clear who was left behind, as countries where natural resources were tightly controlled were less flexible.

Source: Economic Times

Reliance Industries Limited (RIL) announced its sixth oil discovery in exploratory block CB-ONN-2003/1 (CB 10 A&B), awarded under the NELP-

V round of exploration bidding.

The well CB10A-T1 was drilled to a total depth of 1500 meters in Part A of the block, with the objectives of exploring the play fairway in the Miocene Basal Sand (MBS) of Babaguru Formation as well as the Oligocene play of Tarapur Formation. The Hydrocarbon bearing zone was identified from 1390-1402.5m in the Miocene Basal Sand (MBS) of Babaguru formation. Conventional production testing was carried out in the interval 1390-1395 m. The well flowed at a rate of 415 barrels of oil per day (bopd), through a 6-mm bean with a flowing tubing head pressure of 290 psi.

The discovery is significant as this play fairway is expected to open more oil pool areas, leading to better hydrocarbon potential within the block. The block CB-ONN-2003/1 is located at a distance of about 130 kms from Ahmedabad in Gujarat, in the Cambay basin. The block covers an area of 635-sq km in two parts, viz. Part A & Part B. RIL, as Operator, holds 100% Participating Interest (PI) in the block.

While the entire block was covered with 2D seismic, about 80% of the block area has 3D seismic coverage. Of the 16 exploratory wells drilled in the block by RIL so far, 12 are located in Part-A and the remaining 4 in the Part B of the block. RIL is continuing further exploratory drilling efforts in the block.

The discovery, named ‘Dhirubhai–49’, the sixth oil discovery in the block so far, has been notified to the Government of India, and to the Directorate General of Hydrocarbons. The potential commercial interest of the discovery is being ascertained through additional data gathering and analysis.

The discovery supplements the understanding of the petroleum system in the Cambay basin in general, and the block in particular. Based on the interpretation of the acquired

3D seismic campaign in the contract area, several more prospects with upside potential have been identified at different stratigraphic levels.

Source:http://news-views.in/ril-makes-sixth-oil-discovery-in-block-cb%E2%80%93onn%E2%80%9320031/

Reliance Industries Limited (RIL) announced its fifth oil discovery in exploration block CB-ONN-2003/1 (CB 10 A&B), awarded under the NELP-Vround of bidding. The block CB-ONN-2003/1 is located at a distance of about 130 kms from Ahmedabad, Gujarat, in the Cambay basin. The block, in which Reliance holds 100% participating interest, covers an area of 635 square kilometres, the company said. The discovery is significant as this play fairway is expected to open more oil pool areas, leading to better hydrocarbon potential within the block.

RIL drilled the well CB10A-J1 to a total depth of 1957 metres in Part A of the block, with the objective of exploring the play fairway in the Miocene Basal Sand (MBS) of Babaguru formation and Eocence Pays of Kalol formation. Hydrocarbon bearing zone was identified at a depth of 1376-1385.5 metres in the Miocene Basal Sand (MBS) of Babaguru formation.

Conventional production testing was carried out in the interval of 1376-1381.5 m. The well flowed at a rate of 255 barrels of oil per day (bopd), through a 6-mm bean with a flowing tube head pressure of 180 psi. The discovery is significant as this play fairway is expected to open more oil pool areas, leading to better hydrocarbon potential within the block. The block covers an area of 635-sq km in two parts viz., Part A & Part B. RIL, as Operator, holds 100% Participating Interest (PI) in the block. While the entire block was covered with 2D seismic, nearly 80% of the block area also has 3D seismic coverage. Of the fifteen (15) exploratory wells drilled in the block by RIL so far, 11 are located in Part-A and the remaining 4 in the Part B of the block.

RIL is continuing further exploratory drilling efforts in the block. This discovery, named ‘Dhirubhai–48’, the fifth oil discovery in the block so far, has been notified to the Government of India and to the Director General of the Directorate General of Hydrocarbons. The potential commercial interest of the discovery is being ascertained through more data gathering and analysis. This discovery supplements RIL’s understanding of the petroleum system in the Cambay basin in general and the block in particular. Based on interpretation of the acquired 3D seismic campaign in the contract area, RIL has identified several more prospects at different stratigraphic levels with upside potential.

Source:http://news-views.in/reliance-industries-gas-in-cambay-basin/

Even as India Inc and the government rejoices over the settlement between Mukesh Ambani and Anil Ambani, it seems like the drama is not over yet. NDTV has learnt that Mukesh Ambani-led Reliance Industries now wants the government to clarify its gas allocation policy before it begins talks with RNRL over gas supplies.

For this the company has already sent feelers to the empowered group of ministers (EGoM) members seeking further clarity, sources said.

Sources said RIL has informed the government that there is no room for re-negotiation as per the government’s current gas utilisation policy.

Sources close to the development also say that RIL wants the government to play a significant role in renegotiations with RNRL. When contacted, RIL declined to comment on the news.

The Supreme Court had on May 7 rejected Anil Ambani Group firm RNRL’s claim for cheap gas from RIL as had been decided in a private family agreement of 2005. The apex court had directed the two companies to rework gas supply pact keeping the government’s pricing and utilisation policy in mind.

RIL and RNRL are likely to meet formally next week for renegotiations on the family pact that provided for Anil Ambani firm getting 28 million cubic meters per day of gas for 17 years.

Source:http://news-views.in/ril-seeks-clarification-on-gas-utilisation-policy/

Reliance Industries has suspended drilling of a well in its D3 block in the Krishna Godavari basin, as the rig, which was on hire from Transocean, developed problems.

A drillship of Transocean deployed in the Gulf of Mexico had exploded last month, causing a huge oil leak.

Hardy Oil and Gas, which is RIL’s partner in the KG-D3 block said there were “unresolved mechanical issues” with Transocean’s rig “Deepwater Expedition” which was drilling an exploration well in the block. RIL, which is the operator, holds the majority 90 per cent stake in the KG-D3 block; Hardy holds the rest.

“The KGV-D3-W1 exploration well (in D3 block) has been temporarily suspended due to unresolved mechanical issues associated with the blow out preventer (BOP) of the deepwater expedition drilling rig,” Hardy Oil said in a statement.

Hardy CEO Yogeshwar Sharma said: “In the interest of safety, the D3 joint venture has taken the considered decision to suspend the W1 well. The operator — RIL — is working towards mobilising an alternative rig at the earliest.”

The well, Hardy, said, will be re-drilled using an alternative deepwater rig. It did not say what would be the fate of deepwater expedition drilling rig.

A Reliance Industries spokesperson refused to comment on the issue.

US-based Transocean’s Deepwater Horizon had exploded on April 20, killing 11 people and causing a leakage in a well leased by British Petroleum (BP).

State-owned power utility NTPC will buy an additional 1.5 million cubic meters a day of gas from Reliance Industries at government-approved price of $4.2 per mmBtu to feed its power plants in north India.

The government had allocated NTPC 4.46 mmscmd of gas from RIL’s eastern offshore KG-D6 fields but it currently draws only 1.81 mmscmd due to resistance from state gas utility GAIL to transport additional volumes, official sources said.

Close to 60 per cent of the allocated volumes were for NTPC’s Kawas and Gandhar power plants in Gujarat. But the state-owned firm did not want to use KG-D6 gas at these plants since it was in litigation with the Mukesh Ambani firm over fuel supplies to expansion projects planned at these sites.

So, an Empowered Group of Ministers (EGoM) last year decided that the state gas utility GAIL India will swap KG-D6 gas with fuel from other fields. Under this scheme, gas from western offshore Panna/Mukta and Tapti (PMT) fields that was currently supplied to NTPC’s northern India plants, was to be diverted to Kawas and Gandhar. The deficit at the northern India plants was then to be made up by KG-D6 gas.

Sources said GAIL was however not willing to implement this. It feared that if PMT gas was supplied to Kawas and Gandhar, it would displace the costlier LNG that those plants currently bought. Kawas and Gandhar currently buy imported-LNG at about 50 per cent more price then the delivered cost of RIL gas.

The Petroleum Ministry, they said, a few days back convened a meeting to convey to GAIL in no uncertain terms that the EGoM decision has to be implemented at all cost.

It was decided that 1.5 mmscmd of PMT gas that is currently being supplied to NTPC’s northern power plants would be diverted to Kawas and Gandhar. The northern plants will then be supplied KG-D6 gas.

GAIL markets gas from PMT fields which is priced at $5.65-5.73 per million British thermal unit.

Sources said the scheme would be implemented in couple of weeks. NTPC has contracted 0.79 mmscmd of KG-D6 gas for its Anta plant in Rajasthan, 0.54 mmscmd for Dadri unit in Uttar Pradesh, 0.26 mmscmd for its Auriya plant in Rajasthan and 0.22 mmscmd at its Faridabad unit in Haryana.

With the swap, supplies would go up to 3.31 mmscmd. This would still leave 1.15 mmscmd of allocated quantities to be supplied.

RIL currently produces about 63-64 mmscmd of gas as against a potential of 80 mmscmd as government nominated customers like NTPC are yet to offtake their full allocated quantity.

KG-D6 gas has replaced costly imported LNG at Anta plant to save Rs 150 crore in power generation cost annually.

Source:http://economictimes.indiatimes.com/news/news-by-industry/energy/oil–gas/NTPC-to-buy-15-mmscmd-more-gas-from-RIL/articleshow/5784912.cms

State-owned Oil and Natural Gas Corp (ONGC) may have won a large oil block in Venezuela but the Petroleum Ministry wants Reliance Industries to join the project to give stability to the venture.
ONGC Videsh Ltd, the overseas investment arm of the state-run explorer, and Reliance had in 2008 teamed up to bid for the Venezuela’s Carabobo field auction but last year the Mukesh Ambani-run firm walked out sighting delays in the bid round. OVL subsequently roped in Spain’s Repsol YPF and Malaysian state Petronas to win Carabobo-1 heavy oilfield.

But since the project involves investments that may over the life of the project run into USD 40 billion, the Oil Ministry wants Reliance back into the project, sources in know of the development said.

Sources said fillers at very high level were sent to Reliance but it has so far remained non-committal on taking the state.

Reliance has, however, agreed to bail the state-run firms out agreeing to buy over one-fifth of the 400,000-480,000 barrels per day of oil production envisaged from the project.

OVL, Repsol and Petronas all have an 11 per cent stake each in the project, while Indian Oil Corp (IOC) and Oil India Ltd (OIL) have 3.5 per cent each. The remaining 60 per cent is held by Venezuela’s state Petroleos de Venezuela (PdV).

As per the bid conditions, the foreign firms, who were offered a maximum of 40 per cent stake in the project, had to commit to offtake the entire production.

Sources said of the planned output, Repsol had indicated it can take 165,000 barrels per day while Petronas said it could take 100,000 bpd. The remaining 220,000 bpd was split equally between OVL and OIL.

OVL’s share of 110,000 bpd would go to ONGC’s subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL), while Reliance agreed to take OIL’s share for at least 10 years from the start-up in 2016-17.

Source:http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/OilMin-wants-RIL-to-join-hands-with-ONGC-for-Venezuela-project/articleshow/5749798.cms

Reliance Industries Ltd (RIL) is yet to take a final decision on roping in a new partner for the Haryana SEZ coming up in Gurgaon and Jhajjar. While speculations are on that the company is in talks with Infrastructure Leasing & Financial Services (IL&FS) and the modalities are being worked out, sources in Haryana State Infrastructure and Industrial Development Corporation (HSIIDC), the joint venture partner in Reliance Haryana SEZ, informed FE that so far the corporation has not received any formal notice fromRIL about the issue.

“Things are likely to be clear once RIL takes a final call on the issue and inform us about the development. After that the steering committee meeting will be held and decision will be taken about the ownership share and other things,” said a senior HSIIDC official.

However, RIL, while accepting that plans are on to engage a strategic partner, maintained silence about the name. Reliance Industries spokesperson said, “The company plans to engage a strategic business associate to maximise the potential of the investments made so far and make the SEZ a truly global investment destination.”

“We have about 10,000 acres of land in possession in two districts and are currently focusing on getting requisite permissions, statutory approvals and clearances, transfer of legal titles, contiguity and financial closure to start the operation. The company has so far invested over Rs 3,000 crore in the project. The project is envisaged to be developed as a fully integrated Industrial Township to attract global and domestic investments.” he added.

The HSIIDC official further said that the company has approached the corporation for acquiring about 1,700 acres of land in Jhajjar for maintaining contiguity. “We have also recommended that Reliance SEZ be developed as a nod under the Delhi-Mumbai Industrial Corridor project. It will facilitate better industrial development within the SEZ,” he said.

Reliance has also filed for seeking a fresh in-principal approval for its Gurgaon SEZ, after the Centre refused to extend the same in December last year, as SEZ rules don’t permit giving third extensions. The approval is yet to come from the Centre.

The Inter-ministerial Board of Approval (BoA) had asked RIL and ten other developers to apply afresh along with respective state governments’ recommendations.

Reliance Haryana SEZ was granted the in-principle approval in March 2006 and the proposals were valid till March 2009 after two extensions.

Source:http://www.financialexpress.com/news/RIL-yet-to-rope-in-partner-for-Gurgaon–Jhajjar-SEZ/574165/

“Reliance Group is increasing sales in the domestic market to meet higher demand,” said James Williams, an economist at energy research firm WTRG Economics in London, Arkansas. “Exports aren’t that profitable since demand in OECD countries is weak.”

The Paris-based Organization for Economic Cooperation and Development represents most of the world’s high-income economies such as the U.S., Japan and Germany.

The Mumbai-based energy explorer and refiner sold 20.65 million metric tons of fuels in India in the nine months ended Dec. 31, up from 8.01 million tons a year earlier, according to Bloomberg calculations based on export figures released by the company.

Reliance, India’s biggest non-state company, started an export-oriented 580,000-barrel-a-day refinery in December 2008. It’s next to an older plant that can process 660,000 barrels a day. Together, they make up the largest refining complex in the world, according to Reliance.

Reliance in 2009 became one of the top 10 charterers of Aframax tankers to ship petroleum products, according to a report released by Poten & Partners, a shipbroker. Aframaxes can carry 637,500 to 1.02 million barrels of fuels.

Source:http://www.bloomberg.com/apps/news?pid=20601091&sid=ann1GXXxXhuw

The world’s largest refining hub could just get even bigger. The second refinery, set up by Reliance Industries Ltd (RIL) at its Jamnagar complex in Gujarat, has already overtaken the older, adjacent refinery in production volumes and could go even further–exceeding its design capacity by at least 20 percent, according to four persons familiar with the development.

The second refinery, which was commissioned by RIL in end-December 2008 to process 580,000 barrels per day (bpd), started full-scale commercial production early this fiscal. It operated at 115 percent of its stated capacity in the October-December quarter, according to the firm’s 22 January statement.

At this rate, the refinery could refine 667,000 bpd, overtaking RIL’s older Jamnagar refinery, which can process 660,000 bpd. Put together, it’s the largest refining operation globally at a single location.

At least two firm officials familiar with the matter and two sector analysts confirmed that the new refinery had the “elbow room” to boost capacity up to 700,000 barrels of crude of oil a day or a fifth more than its nameplate capacity. Although this comes at a time when most sector analysts are forecasting a subdued outlook for the refining and petrochemical segments, they are less worried about the impact an extra dump of refined fuels could have on the oil-and-yarn conglomerate. Other refiners will lose out not RIL, they said.

“Right from the time the design plan for this refinery was announced, a section of the market believed that the capacity will eventually be higher than announced. It happened with the previous refinery too,” said Mumbai-based brokerage Angel Broking Ltd’s analyst Deepak Pareek. He estimates that RIL’s profit before tax could swell by as much as Rs750 crore if the new refinery operated at 120 percent of its stated capacity.

A questionnaire emailed to the RIL spokesperson on Friday remained unanswered till press time. A firm executive explained that when all the parameters in a refinery–such as the crude mix, pressure, heat catalysts and other operating conditions–are at optimum levels, then it can process more than its design capacity through “debottlenecking”, “especially if some elbow room is built into it”. The executive, who did not want to be identified, added that this happened in other places as well, such as fertilizer plants.

Apart from a possible increase in refining, RIL is also undertaking steps to boost storage. International news agency Reuters had reported on 28 January that RIL had leased capacities to store petrol at the Borco oil terminal in the Caribbean, as it eyes the US market and those to its south. The deal on the 500,000 barrels storage facility was secured sometime towards the end of last year, it had said.

“All refineries and plants when they are designed and contracted out, are supposed to run at a certain capacity. To keep it steady at that level, usually a 10-15 percent higher capacity is built into it as a buffer,” said a sector analyst with the Indian arm of a foreign brokerage who, along with his counterpart in another brokerage firm, confirmed that the Mukesh Ambani-owned firm had indicated successfully “stress testing” the new refinery up to 700,000-710,000 barrels of crude a day. The refinery seems to have stabilized faster and achieved higher performance sooner than the street expected. Stress testing helps to determine the stability of a given system and involves testing it beyond the normal operational capacity, often to a breaking point, in order to observe the results.

This analyst, who did not want to be named as he doesn’t officially speak to the media, said the previous refinery too had undertaken the same route and went from a stated capacity of 27 million tonnes to 33 million tonnes– an increase of about 22 percent.

“This higher capacity will be a very low cost expansion,” pointed out Pareek. Concurred the other analyst: “This will go straight to the profits since no capital expenditure is incurred. And this extra capacity is an option RIL can choose to exercise or not. It gives flexibility.” Analysts pointed out that additional supply might depress the product prices but refined fuels are ultimately a commodity with existing demand. This means, if RIL produces more, it may edge out less efficient suppliers.

RIL beat street estimates in the December quarter earnings, clocking higher refining margins–or earnings from turning crude oil into a number of fuels–of $5.9 (around Rs274) per barrel and much of it on account of the higher utilization of the new refinery. The firm doesn’t report margins for the two refineries separately and hence, one cannot delineate its efficiency from the overall performance. The firm had reported a $4 per barrel premium over Singapore gross refining margins, the Asian benchmark, marking a rebound after eight quarters in which RIL saw its lead over peers eroding.

RIL’s chief financial officer Alok Agarwal told reporters after the latest quarterly results that he was “confident” the refining margins will improve in 2010. The new refinery could be of help here.

Source:http://www.livemint.com/2010/01/31220652/RIL8217s-new-Jamnagar-unit.html