Business Daily from THE HINDU group of publications
Friday, Mar 21, 2008
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Friday, Mar 21, 2008 ePaper | Mobile/PDA Version |
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Corporate
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Announcements
Our Bureau New Delhi, March 20 The international consultant appointed by the Government to review Reliance Industries Ltd’s proposed increase in investment for the development of the Krishna-Godavari Basin D6 fields has found that the company has not gold-plated its development cost. RIL’s move to hike what is known as field development plan (FDP) from $2.47 billion to $8.836 billion had led to a controversy with some critics, including some Members of Parliament, apprehending that it was being done to inflate the natural gas price from these fields. The US-based consultant Mustang International was appointed in October 2007 and asked to submit report in four weeks’ time. The consultant was asked to verify cost estimates submitted by RIL for developing Dhirubhai I and III gas fields in KG D6 blocks. According to sources, the consultant has said that work of such magnitude would need at least $9.035 billion. RIL has been maintaining that its cost is amongst the cheapest when it comes to deepwater projects. The increase in the costs is primarily due to a steep escalation in the cost of drilling rigs and the expanded scope of work. The initial development plan had estimated a capex for 5.3 trillion cubic feet (tcf) of recoverable reserves at a plateau production of 40 million standard cubic metre per day of gas (mmscmd). Subsequently, as the company made some dozen discoveries, its estimated recoverable reserve more than doubled to 11.3 tcf and plateau production to 80 mmscmd. This necessitated a revision in the estimated capex. More Stories on : Announcements | Petroleum | Reliance Industries Ltd
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