The Hindu Business Line : Reliance confirms Cauvery find

Spud success
The well is a part of block awarded to Reliance under the NELP III round.
The new discovery completes the company’s success story on the East coast.

Our Bureau

Mumbai, July 17

Reliance Industries Ltd on Tuesday announced the discovery of oil and gas in its very first well, which it drilled in the Cauvery deep-water basin off the coast of Puducherry on the East coast.

Oil and gas was found in the well at the depths of 4,081 metres. The well is a part of block having an area of 14,325 sq km and was awarded to Reliance under the NELP III round.

The total deep-water acreage of the basin is about 1,00,000 sq km where Reliance has four blocks spread over 41,000 sq km. Talking to the media, Mr P.M.S. Prasad, President and CEO of Reliance petroleum business, said that the new discovery opens a significant vista for the entire basin and completes the company’s success story on the East Coast.

Mr Prasad said that the flow rate of well is 1 million standard cubic metres of natural gas per day and 1,000 barrels of oil per day. A source with considerable experience in the oil exploration field indicated that a clearer picture of the oil and gas potential in the field will emerge only after further ‘delienating’ wells are sunk.

He, however, felt that the hydrocarbon column of 150 metres was reasonably large.

Reliance already has a giant gas field in the Krishna Godavari basin of Andhra Pradesh coast, which will start production in 2008. The field will double the natural gas availability in the country.

Mr Prasad said that the company has pumped in Rs 9,000 crore in the exploration of the KG basin, which exceeded the work production contract by over Rs 6,000 crore.

The cost overruns have been mainly due to constraints in supply chain and acute shortage of oilrigs, he said and added, “The oil rigs, which were available for hire at $2,25,000 per day in 2003, today cost $7,50,000, which includes rigs and service costs of drilling, cementation and logging. The shortage of rigs is likely to continue till 2011.”

Sharing of rigs

Asserting to be a supporter of the sharing of rigs, Mr Prasad said that Reliance was ready to share rigs with fellow operators in India, and were in talks with ONGC and DGH, among others, but cannot progress on it due to the lack of any rigs available.

Reliance will hire eight rigs by 2008, which will largely be deployed for production purposes, which are a priority. Next they will be deployed in KG basin for drilling purposes. Of the eight rigs, four are capable of digging in ultra-deep waters of up to 2,000 metres, he said.

Reliance shares ended the day at Rs 1,827.35, up 2.86 per cent, on the BSE.

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