The Hindu Business Line : Reliance third well in Cauvery Basin turns out to be dry

Digging for oil
In the Cauvery asset, RIL has no further drilling commitment.
The company struck hydrocarbon in the first well drilled in the block
The second well was abandoned due to a technical snag.

Richa Mishra

New Delhi, Dec. 9 Reliance Industries Ltd (RIL) seems to have run out of luck in its deepwater Cauvery asset. The company has been able to strike hydrocarbon in only one of the three wells drilled in CY-DWN-2001/2 (CY-D5). In October, RIL had re-entered the asset to carve out the third well.

Sources told Business Line that drilling activity in the third well which started in October had been completed and the company had not done any hydrocarbon testing. RIL had earlier this year struck hydrocarbon in the first well drilled in the block and had to abandon the second well due to a technical snag.

As on date, RIL has 34 oil and gas blocks in its kitty, and has made about 34 discoveries (both commercial and non-commercial) in India with a success ratio of 60 per cent. The company has drilled over 30 dry wells till now.

Rig moved to KG basin

RIL has now moved the drilling rig to its Krishna Godavari asset KG-OSN-2001/1, the shallow water block where it has already made a discovery. In the Cauvery asset, RIL has no further drilling commitment. Sources said that in these kinds of blocks (CY-D5), called ‘wild cat blocks’, the success ratio is one in 10. Therefore, the company’s strike rate of one in three is not below the international average. The wild cat blocks are new frontier areas.

The financial implications of hitting a dry well would largely depend on the results of the first find, industry analysts say. “If size of the discovery is not very big in the first well, it would not be economically very viable.

Further, if two-three dry wells are drilled in the region, then the accumulated area is limited, thus making the success largely dependent on the size of the first discovery. Besides, the company may be required to rethink its exploration model,” analysts said.

The find in the first well showed there were two zones. In the first zone, as per the initial tests, RIL has found 550 barrels per day of oil and one million cubic ft per day of gas, while in the second zone, it found 31 million cubic ft per day of gas and 1,200 barrels per day of condensate.

RIL has already informed the Directorate General of Hydrocarbons about it. The block is 14,325 sq km in size.

RIL had deployed its rig Actinia to undertake the activity. The third well was altogether a separate geological structure, quite different from what has been discovered in the block.

When it re-entered the NELP-III block, RIL had the option of resuming activity in the abandoned second well.

However, the company decided against it and, based on seismic surveys, decided to carve out another area in the block, sources said. RIL holds 100 per cent interest in the block.