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/

Energy major Reliance Industries and Reliance Natural Resources Ltd will reach a gas supply agreement in the next two weeks, taking forward a patch-up between the billionaire Ambani brothers the Economic Times reported on Thursday.

The agreement, being negotiated between officials of the two companies, aims for Mukesh Ambani-controlled Reliance Industries to supply gas for 10 years from 2012 to power plants run by his younger brother Anil, the newspaper said, without saying where it got the information from.

After five years of a bitter feud that split India’s richest family, the brothers had unexpectedly called a truce on Sunday by ending a non-competition agreement that was a source of acrimony between them.

Earlier this month Anil lost a Supreme Court battle with Mukesh in a gas pricing dispute, with the court ordering the brothers to renegotiate within six weeks a private natural gas supply contract and gave the government control over setting gas prices.

The Economic Times said there was a possibility that Reliance Industries may pick up significant minority stakes in gas-based power plants owned by Anil Ambani’s group.

A spokesman for Reliance Industries said he had no comment on the report, while Anil Dhirubhai Ambani Group could not be immediately reached.

Source:http://news-views.in/ambanis-to-reach-gas-deal-in-2-weeks/

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).

India’s top auditor CAG has said that audit of the D-6 oil block in the Krishna-Godavari basin operated by Reliance Industries is likely to take 4-5 months more to be finished.

“We require 4-5 months to complete the audit… The process would take time, as this is the first time that we are looking at a private player’s books… It’s a very detailed process”, Comptroller and Auditor General Vinod Rai said.

The CAG is auditing Rs 45,000 crore capital spending by RIL, which is controlled by Mukesh Ambani, to tap natural gas from the D-6 block in K-G basin, following a request from the petroleum ministry in 2007.

He said that RIL had submitted all related documents sought by CAG by the end of January this year.

“All the firms, including RIL, have submitted required documents that we have sought,” said Rai.

However, a Reliance Industries spokesperson refused to offer any comment on the issue.

In a hard-pitched battle last year between the Ambani siblings, younger brother Anil Ambani had alleged that Mukesh-controlled RIL had inflated capital spending to Rs 45,000 crore from the initial estimate of Rs 12,500 crore for the D-6 block.

CAG’s scope of audit is in respect of the block KG-DWN-98/3 (KG-D6) awarded to RIL for two financial years — 2006-07 and 2007-08 — with access to records of previous years linked to transactions in these years.

It is also understood that the scope of this audit will far exceed the normal course of audit by the CAG and the prime objective may be to detect fraud, if any, by the operator (RIL), allegedly in collusion with oil regulator DGH and the Ministry of Petroleum and Natural Gas.

In 2007, the Petroleum Ministry had asked the CAG to conduct an audit of seven oil and gas blocks, including RIL’s KG-D6 block. After initial reluctance, the CAG is now conducting the audit of four oil & gas blocks, namely KG-D6 of RIL, the Barmer and Ravva oilfields being operated by Cairn India and the Panna-Mukta-Ta.

Source:http://www.hindustantimes.com/RIL-s-K-G-basin-audit-to-take-4-5-months-to-complete-CAG/Article1-544355.aspx

India’s top court has given a unanimous verdict today on the Ambani gas row upholding the government’s right to determine gas-pricing. The Supreme Court had finally given a judgment on the gas-pricing dispute between the Ambani brothers that has raised concerns over the government policy on gas pricing for India’s upcoming energy based economy and rattled investors.

The verdict delivered by Judge Sathasivan and supported by all others with Reddy disagreeing only on one minor point. The case in the Supreme Court was heard by a three-judge bench. Two of the judges have delivered separate verdicts and majority opinion prevailed. This judgment is based on the basic fact the gas is a public good and belongs to the government and its people.

Mukesh Amabani’s point that he could not go against the government’s Production Sharing Contract has been re-iterated by the government. As an extension of the judgment Anil and Mukesh Ambani have been given six weeks to renegotiate the contract that forces RIL to sell gas to RNRL. The judge said that a government contract over-rides all private agreements and the memorandum of understanding between the two brohers signed in 2005 does not stand.

The Chief Justice has signed the verdict on the RIL RNRL gas row delivered by Justice Sathasivan. The verdict says that both brothers must sit down and re-negotiate the gas supply master agreement (GSMA) and then come back to the Court in 6 weeks. The verdict further said that gas is a national asset and belongs to the government till delivered to the consumer. The court said it will give its direction in 8 weeks.

The previous MoU has stood to be in contradiction with the government policy as well as the Production Sharing Contract. The re-negotiated agreement between RIL and RNRL will have to be reworked within the ambit of the government’s gad pricing policy. Further the judgment adds that the government regulation must dictate the renegotiation plan and RIL and RNRL should renegotiate under government rules.

Source:http://www.reliance-news.com/mukesh-ambani/mukesh-ambani%E2%80%99s-points-were-in-line-with-supreme-court-verdict/

Reliance Industries’ KG-D6 gas has saved 32 per cent in fertiliser subsidy as urea making plants shifted from costlier liquid fuels to cheaper gas, the Rajya Sabha was informed today.

“The reduction in naphtha usage in existing gas-based unites has reduced the subsidy cost to the government by approximately 32 per cent. The reduction in subsidy by shifting to natural gas has resulted in savings of subsidy bill,” the minister told the Upper House in a written reply.

Fertiliser subsidy is pegged at Rs 49,980.73 crore in 2010-11 fiscal from Rs 52,980.25 crore in the previous year. In 2008-09 fiscal, subsidy was over Rs 1,00,000 crore.

Under fertiliser subsidy, the government would provide Rs 15,980.73 crore for indigenous (urea) fertilisers, Rs 5,500 crore for imported (urea) fertilisers and Rs 28,500 crore for sale of decontrolled fertilisers (DAP, MOP and complexes) with concession to farmers.

Source:http://economictimes.indiatimes.com/news/economy/finance/Reliance-KG-D6-gas-has-saved-32-in-fertiliser-subsidy-Govt/articleshow/5878007.cms

State-run power producer NTPC is likely to sign contracts next week to buy an additional 1.51 million cubic meters a day of gas from Reliance Industries at government-approved price of $4.2 per mmBtu.

The additional gas would be used at NTPC’s Anta and Auriya plants in Rajasthan, Dadri unit in Uttar Pradesh and Faridabad plant in Haryana, official sources said.

Since these plants have already signed Gas Sales and Purchase Agreements (GSPA) for volumes totaling 1.81 mmcmd, only side-letters need to be signed for additional gas.

Sources said side-letters may be signed next week.

This follows Power Ministry’s ultimatum to NTPC to sign contracts immediately. While the government had allocated 4.46 mmcmd of gas from RIL’s eastern offshore KG-D6 field, NTPC has so far signed only for 1.81 mmcmd.

At a recent review of gas withdrawal from RIL’s eastern offshore KG-D6 fields, it was informed that the government had allocated 31.1 mmcmd gas to power sector on firm basis and an additional 12 mmscd on fall back or temporary bais. Against this, only 30.11 mmcmd was been drawn by the power utilities.

It was stated at the meeting that if the power utilities continue to draw less quantity of gas than what has been allocated, there is a possibility that the unutilised gas is allocated to other sectors, they said.

Of the 4.46 mmcmd allocated to NTPC, 2.65 mmcmd was for its 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.

But since PMT gas supplies to NTPC’s northern plants was only 1.51 mmcmd, a swap of only that volume has been affected.

Sources said GAIL has decided that 1.51 mmcmd 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.

NTPC currently buys 0.79 mmcmd of KG-D6 gas at its Anta, 0.54 mmcmd at Dadri, 0.26 mmcmd at Auriya and 0.22 mmcmd at its Faridabad unit.

With the swap, supplies would go up to 3.31 mmcmd.

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

Source:http://www.business-standard.com/india/news/ntpc-may-sign-for-additional-kg-d6-gas/92099/on