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).

RIL executive director PMS Prasad, a long-serving hand since the late 1980s, has been the company’s public face all through the gas battle — whether at Court Room No 1 at the Supreme Court, or the corridors of Shastri Bhavan that houses the petroleum ministry. Prasad was present on Friday too as the drama was about to be capped in the Supreme Court. ET caught up with him immediately after the judgement

<strong>What is it that came to your mind when the judgement was announced? </strong>

Relief! That it’s all over.

<strong>Who was the first to congratulate you after the judgement? </strong>

My boss Mukesh Ambani. He said it was a good job done and we need to get back to work. I also got a call from Mrs Ambani, who said we have to move on to the next generation of value creation.

<strong>How is Monday 9 am going to be different? </strong>

It’s going to be a different day. We are relieved of the tension. We have to get down to business and begin negotiations with RNRL.
<strong>
Is this the best judgement? </strong>

Under the given circumstances, one could not hope for a better judgement.

<strong>How do you plan to go about negotiating the agreement with RNRL? </strong>

We have to negotiate a fresh gas sale and purchase agreement, which has to be bound by the broad parameters laid down by the court. Any fresh gas sales purchase agreement will have to uphold the price approved by the government, honour the utilisation policy of the government and various empowered Group of Ministers’ (eGoM) decisions with regard to utilisation.

<strong>What are the parameters that you will need to thrash out with RNRL? </strong>

The issues will include other parameters of GSPA like liability, penalty, alternative arrangements for fuel, the quantity of gas, quality of gas, etc. We have already concluded GSPA with several consumers and this GSPA will have to be similar to those.

<strong>Did the court mention the family MoU? </strong>

Yes. Although the court held the production-sharing contract was supreme, it directed RIL & RNRL to renegotiate in the context of the existing MoU; more like the MoU being a backgrounder under which we could renegotiate. But at all times, it is the supremacy of the PSC and the government decision that have to be kept in mind.

<strong>How long will you have to reach that agreement — do you have a timeframe? </strong>

We have to go back to the Mumbai HC within six weeks and then if we can mutually agree to a GSPA, it will need to be verified and approved by the government.

<strong>Are you saying RNRL & RIL can possibly be business partners where RIL is the gas seller and RNRL the buyer? </strong>

Yes! There is every possibility that we will work as partners and we will make a genuine effort to reach out and settle this GSPA in accordance with the court order and government law.

So, what is clear is that you are willing to provide gas at $4.2 mmBtu if the government approves the contract.
Yes, that is the price we will start negotiations at.

<strong>What are the key takeaways of today’s verdict? </strong>

It is clear that we have to follow all government policies and eGoM decisions and the PSC is the basis for all contracts. Secondly, the court order has also made it clear that the government has the right to determine prices and allocate the gas as per national interests. It has in a way only reaffirmed what the government has been saying. Thirdly, by directing us to renegotiate, but referring to the family MoU, the court has asked both RIL and RNRL to initiate talks and take action within six weeks.

<strong>How do you think this order will be received by investors, particularly global oil majors? </strong>

We expect the government to come out with a clear policy, which will state all that the verdict has said so that investors have complete confidence in consistency of policies. If companies like Exxon, Chevron and Shell can go to countries like Nigeria or Venezuela where there is so much political uncertainty, there is no reason why investors should not come to India.

<strong>Any regrets? </strong>

Yes. Too much time was wasted. There is not a single decision that the government has taken in the last seven months. And institutions like the Director General of Hydrocarbons, the petroleum ministry and even the CAG have suffered a huge reputation damage. And as for the advertisements in the newspapers where it was said that the petroleum minister was in RIL pockets.(laughs) I constantly looked for him but didn’t find him. We need to get back to business, value creation and positive thinking.

Source: http://news-views.in/pms-prasad-well-make-an-effort-to-reach-out-to-rnrl/

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

Two judges of a three-member bench delivered separate verdicts on the ongoing Ambani gas row between Mukesh Ambani’s Reliance Industries and younger brother Anil’s Reliance Natural Resources. The case involves terms of a deal under which Reliance Industries was to supply Anil Ambani’s Reliance Natural with 28 million standard cubic metres a day (mmscmd) of gas for 17 years at a rate below the government price.

Reliance Industries CMD, Mukesh Ambani had argued the private deal cannot take precedence over government policy, which determines who can receive gas and at what price.

RNRL’s Anil Ambani, who claimed otherwise, rolled out a series of front-page advertisements in major newspapers accusing the government of taking the side of Reliance Industries.

Agreeing with RIL’s argument, the Chief Justice of India issued a final verdict that said a memorandum of understanding between the two brothers signed in 2005 is not binding on RIL, a government contract over-rides all private agreements. SC has asked both brothers to 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 verdict means that the re-negotiation has to take place within the ambit of the government’s policy. Further the judgement adds that the government regulation must dictate the renegotiation plan and RIL and RNRL should renegotiate under government rules.

Minutes after the Supreme Court declared the verdict in favour of RIL, in the Ambani Gas Row, Oil Minister Murli Deora welcomed the move and called it a vindication of the Govt’s stand. “The Govt is satisfied with the verdict. The Govt has the power to decide the price of gas and the power to allocate.”

Oil Secy S Sundareshan added, “Right from the beginning, the Ministry has been saying that gas is the property of the nation, and we believe the court has upheld the terms of the Production Sharing Contract.”

“Now there is complete clarity on gas policy and the decision of the Bombay High Court has been quashed. We will continue to regulate gas pricing and policy in future.” However, he also said that he was unaware of what has to be renegotiated in the case.

Source:http://reliance-news.blogspot.com/2010/05/ambani-gas-row-government-emerges.html

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/