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Posts Tagged ‘KG Basin’

Reliance profits to rise with higher output from KG

April 22nd, 2010 admin No comments

Energy major Reliance Industries should post a second straight increase in quarterly profit, lifted by higher gas output from fields off India’s east coast and a nascent recovery in refining margins.

India’s leading listed conglomerate, controlled by billionaire Mukesh Ambani, has been scouting for acquisitions overseas, and progress on that front will determine its outlook. Reliance, valued at $78 billion, recently said it would pay $1.7 billion to form a joint venture at one of the most promising natural gas deposit regions in the United States with Atlas Energy.

The deal followed two failed attempts to buy overseas firms as Reliance looks to expand its presence outside India, break into new markets and broaden its businesses, which include refining, oil and gas exploration and petrochemicals.

“The company has already invested in its own projects such as its gas fields in India and is going to generate a lot of cash flow,” said Deepak Pareek, an oil and gas analyst at Mumbai-based Angel Broking.

“A lot of that cash has to be pumped into overseas growth opportunities and that’s exactly what it’s done with Atlas.” Bankers say more overseas deals could be in the offing. The outcome of a long-running gas dispute with Reliance Natural, led by Mukesh’s younger brother Anil, will also have a bearing on the company’s outlook.

Reliance is unable to hit peak gas production of 80 million standard cubic metres a day (mmscmd) at its D6 block in the vast Krishna Godavari basin in the Bay of Bengal due to customers not buying allocated volumes, and a lack of pipelines. But analysts say current production of 63-64 mmscmd is still enough to boost results.

Reliance began pumping gas from the block in April last year. Analysts estimate gross refining margins (GRMs), a key measure of profitability, will have dropped about 16 per cent year-on-year in the March quarter to $8.30 a barrel, tracking a decline in Asia’s benchmark Dubai crack margin.

Reliance GRMs nearly halved to $5.90 a barrel in the December quarter. The company’s results will be helped by its acquisition last year of unit Reliance Petroleum. State-run explorer Oil and Natural Gas Corp is expected to post higher earnings on firmer oil prices, but subsidy payouts the group is required to make to state retailers will keep results muted.

A lack of clarity about the government’s subsidy rules means analysts estimates for ONGC are often disparate. “What you’d want to bet on is a company’s business or its management decisions,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services. “But here you are betting on whether a government policy will change or not, which just can’t be figured out.” Energy major Reliance Industries should post a second straight increase in quarterly profit, lifted by higher gas output from fields off India’s east coast and a nascent recovery in refining margins.

India’s leading listed conglomerate, controlled by billionaire Mukesh Ambani, has been scouting for acquisitions overseas, and progress on that front will determine its outlook. Reliance, valued at $78 billion, recently said it would pay $1.7 billion to form a joint venture at one of the most promising natural gas deposit regions in the United States with Atlas Energy.

The deal followed two failed attempts to buy overseas firms as Reliance looks to expand its presence outside India, break into new markets and broaden its businesses, which include refining, oil and gas exploration and petrochemicals.

“The company has already invested in its own projects such as its gas fields in India and is going to generate a lot of cash flow,” said Deepak Pareek, an oil and gas analyst at Mumbai-based Angel Broking.

“A lot of that cash has to be pumped into overseas growth opportunities and that’s exactly what it’s done with Atlas.” Bankers say more overseas deals could be in the offing. The outcome of a long-running gas dispute with Reliance Natural, led by Mukesh’s younger brother Anil, will also have a bearing on the company’s outlook.

Reliance is unable to hit peak gas production of 80 million standard cubic metres a day (mmscmd) at its D6 block in the vast Krishna Godavari basin in the Bay of Bengal due to customers not buying allocated volumes, and a lack of pipelines. But analysts say current production of 63-64 mmscmd is still enough to boost results.

Reliance began pumping gas from the block in April last year. Analysts estimate gross refining margins (GRMs), a key measure of profitability, will have dropped about 16 per cent year-on-year in the March quarter to $8.30 a barrel, tracking a decline in Asia’s benchmark Dubai crack margin.

Reliance GRMs nearly halved to $5.90 a barrel in the December quarter. The company’s results will be helped by its acquisition last year of unit Reliance Petroleum. State-run explorer Oil and Natural Gas Corp is expected to post higher earnings on firmer oil prices, but subsidy payouts the group is required to make to state retailers will keep results muted.

A lack of clarity about the government’s subsidy rules means analysts estimates for ONGC are often disparate. “What you’d want to bet on is a company’s business or its management decisions,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services. “But here you are betting on whether a government policy will change or not, which just can’t be figured out.”

Source:http://reliance-news.blogspot.com/2010/04/gas-sales-to-lift-reliance-results-m.html

Reliance finds more gas in KG basin

April 12th, 2010 admin No comments

Reliance Industries has informed oil regulator DGH that four smaller gas finds surrounding the D-1 and D-3 fields in the Krishna-Godavari basin can be commercially exploited.

RIL on February 19 informed the oil regulator Directorate General of Hydrocarbons (DGH) that four smaller gas finds, surrounding the D-1 and D-3 fields, which are currently producing around 62 mmscmd of gas, can be commercially exploited, sources in know of development said.

RIL estimates that four smaller gas finds in the prolific KG-D6 block may contain 1-2 Trillion cubic feet of reserves and may help prolong peak output of 80 million standard cubic meters per day (mmscmd) from the block, sources said.

“These four finds were made in 2008 and RIL had at that time notified them as discoveries. They have now submitted ’Potential Commercialilty Interest’ which means that they can be exploited commercially,” a source said.

Once DGH approves commerciality, RIL will submit a detailed development plan, detailing investment and production potential.

RIL has so far made 25 oil and gas discoveries in KG-D6, of which two – D1 and D3, have been put on production at an investment of $ 8.836 billion. Besides D1 and D3 gas fields and MA oil discovery, nine other gas finds were previously declared commercial and now four more may be added to the list.

In 2008, RIL submitted plans to invest $ 5.91 billion in nine satellite finds but later pruned the list to just four considering government-fixed gas price of $ 4.20 per million British thermal unit did not justify such high additional investment.

The company on December 29 revised this to $ 1.5 billion spanning 0.6 Trillion cubic feet recoverable reserves in the four finds that could produce 10 mmscmd for 6 years.

The remaining five discoveries had been kept for developing at a later date, sources said adding these five and the four finds that are now in the process of being declared commercial may be clubbed together for development.

It will take 4-5 years to bring to production the four finds for which field development plan (FDP) has been submitted and the other finds may not come into production before 2016 by when D1 and D3 output would have hit decline phase.

The discoveries would be tied-up with Dhirubhai 1 and 3 (or D1 and D3) production facilities, which are designed to handle 80 mmscmd of output.

Sources said the mining licence for most of the 1.9 million acres of KG-DWN-98/3 or KG-D6 block has expired that it would need extension from the government to do additional exploration work.
The mining lisence expiry, however, may not impact the approved commercial finds which would be more governed by the field development plan approved by the DGH and the government.

Source:http://beta.thehindu.com/business/article392880.ece

KG Basin: RIL’s Equipment @ KG Basin

October 5th, 2009 admin No comments

Reliance Industries Ltd.’s (RIL’s) work on its KG-D6 in the Krishna-Godavari basin (KG basin) has included development of at least 18 production wells, with subsea equipment, pipelines, a riser platform and an onshore terminal.

This rapid development had involved one of the world’s largest and most complicated underwater installations. Through a $ 400 million Engineering, Procurement and Construction (EPC) contract, Aker Kvaerner Subsea was in charge of the complete subsea production system.

Meanwhile, the 9,015 ton platform jacket was manufactured as part of an engineering, procurement, construction, and installation contract by J Ray McDermott.

KG Basin: RIL Strikes more Gas in KG Basin

October 5th, 2009 admin No comments

In September 2007, India’s largest private sector company, Reliance Industries Limited (RIL) announced an oil discovery in the deepwater block KG-DWN-98/1 (KG-D4) located in the Krishna-Godavari basin (KG basin). This block was awarded to RIL, which holds 100% participating interest in it, under NELP-I and spans an area of 8100 sq kms.

The find, named ‘Dhirubhai – 36’, was the premier oil discovery in the deep-water basin of the area. The well was located in a water depth of 565 meters and was drilled to a target depth of 3595 meters. During the Drill Stem Testing (DST), the well flowed 596 barrels of oil per day.

KG Basin: Reliance – Answer to India’s energy problem

October 5th, 2009 admin No comments

In September 2009, the Directorate General of Hydrocarbons (DGH) said that the gas output from only the fields managed Reliance Industries Ltd. (RIL) could be almost 4 times the levels committed by the company so far.

The mammoth implication of these figures lies in its oil equivalence. Totaling about 2 million barrels of oil per day, it wholly covers India’s current consumption of oil. Ironically, most of this oil is imported by the country.  However, the nation’s gas consumption is over and above this expected output.

Yet, if both DGH and RIL confirm this production potential, it would mark the most significant energy development India has ever seen!

KG Basin: Quadruple Output Possible from Reliance’s Fields, says DGH

October 5th, 2009 admin No comments

There is no doubt about the fact that the Krishna-Godavari basin (KG basin) is hydrocarbon-fertile. Since only about 1/3rd of the total potential for exploration wells has been drilled so far, the basin certainly holds far more gas in its womb than has been discovered so far.

In September 2009, the Directorate General of Hydrocarbons (DGH) said that the gas output from only the fields managed Reliance Industries Ltd. (RIL) could be almost 4 times the levels committed by the company so far.

Currently, RIL has committed 80 million metric standard cubic metres per day (mmscmd) and its current production level is about 36 mmscmd. Hence, if the DGH’s calculations are accurate, RIL’s output would be about 300 mmscmd – almost quadruple!

The gas output from only the fields managed by Reliance Industries Ltd. could be almost 4 times the levels committed, says Directorate General of Hydrocarbons (DGH).

KG Basin: RIL’s Discoveries

October 5th, 2009 admin No comments

The famous KG-DWN-98/l (KG-D6) block, where Reliance Industries Ltd. (RIL) made the world’s largest gas discovery in 2005, spans 8,100 sq. kms. of the Krishna-Godavari basin (KG basin). It lies in the Bay of Bengal on India’s east coast.

The first three discoveries (Dhirubhai-1, Dhirubhai-2 and Dhirubhai-3) have expected gas reserves of 8 tcf.

In March 2003, the exploration team discovered Dhirubhai-4, with in-place gas volumes of 1,700 bn standard cubic feet.

In February 2006, RIL encountered the thickest hydrocarbon column so far in its MA-2 well. This column reached a depth of about 3.6 km and penetrated a gross hydrocarbon column of 194m consisting of 170 m of gas and 24 m of oil.

Initial rate of production from the MA field is about 5,000 barrels per day (bpd) and is expected to reach its peak rate of 40,000 bpd by about mid-2010. D1 and D3 are expected to reach 2.8 bcfd within the first year of operation, although there is flexibility to raise this to 4.2bcfd.

KG Basin: GSPC’s Development Plans underway on the Deendayal Field

October 5th, 2009 admin No comments

In September 2009, the Directorate General of Hydrocarbons (DGH) approved Gujarat State Petroleum Corporation’s (GSPC) field development plan for 2 trillion cubic feet (tcf) for the KG-8 Deendayal-West field in the Krishna-Godavari basin (KG basin). This development plan submitted by GSPC was on the basis of exploration work and the geological model analysed by various agencies. This plan proposes to develop 24 sq km comprising the DDWest block.

GSPC plans to invest $1.6 billion in the development of this field, which would enable it to produce about 10-12 million metric standard cubic metres a day (mmscmd) of gas by the end of year 2011. GSPC will tie up with many expert agencies which will aid it in developing the high pressure, high temperature gas reservoir.

When production commences, the field is expected to have a daily gas output of Rs 10 crore for a period of 30 years.

Categories: GSPC Tags: ,

KG Basin: GSPC Gets Environmental Clearance to Drill Additional Wells

October 5th, 2009 admin No comments

The state-owned Gujarat State Petroleum Corporation (GSPC) submitted a pre-feasibility report in June 2009 and acquired environmental clearance for 16 additional wells to be drilled in its Deendayal gas field in the Krishna-Godavari (KG) basin based on that. These 16 wells would be drilled in the Block KG-OSN-2001/3 and received clearance from the Environment and Forests Ministry.

The KG blocks already drilled by GSPC in the KG basin are spread over 1,850 sq kms of area. The firm already has 15 wells drilled in the KG basin in the water depths of 20 to 170 metres. Of these, 11 are discovery wells, 3 have no gas flow so far and 1 is yet to be tested. GSPC is preparing to drill additional wells up to a depth of 3,000 metres. The waste water generated would be treated and recycled for captive use.

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KG Basin: GSPC’s Great Discoveries

October 5th, 2009 admin No comments

On 17th June 2005, GSPC discovered India’s largest gas reserve in its KG # 8 well. Estimated at 20 TCF and worth over Rs. 2 lakh crores, it was expected to double the country’s gas production.

A year later, on 2nd June 2006, GSPC hit headlines again with a new discovery in another well in the KG basin. For the first time, GSPC struck both oil and gas in the very same well. This new discovery is expected to yield 4.8 million standard cubic feet of gas and 862 barrels of oil per day. In this well, named KG # 17, GSPC struck hydrocarbons at a comparatively lesser depth and at lower temperatures than in its earlier famous find. The higher quality of gas would also enable LPG production that would be of considerable monetary worth in the global markets.

This amazing discovery and GSPC’s ability to convert it into clean, cheap and abundant fuel is potent with the possibility of making India a force to reckon with in the Asian petrochemical market.

Categories: GSPC Tags: ,
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