The Hindu Business Line : Reliance may begin drilling in KG block this year

New Delhi, May 25 Rig availability may once again come in way of Reliance Industries Ltd’s (RIL) plans to meet the exploratory commitments for its deepwater block D9 in Krishna Godavari basin.

Rig shortage had compelled the company to delay its plans to initiate drilling activities in the block, which is adjacent to its prolific D6, in July 2007.

The company hopes to meet its commitments this year.

Sources told Business Line, “The market for deepwater rigs is expected to remain tight in the coming years. Depending on rig availability, the company may have to revise the days to begin the first phase of exploratory activities in the block KG-DWN-2001/1.

The company is aiming to begin work sometime this year.” RIL is expecting a deepwater rig, Expedition, in July and another rig in November, sources said.

However, if the development work in D6 requires the rig, then the Expedition which it plans to deploy in D9 may be diverted to D6 instead. The geoscientists have already completed their work in D9 and according to the seismic data available, the block is prospective, sources said. RIL has to carry out a drilling programme for four wells in the block.

This block was in the first exploration phase, which expired on April 2, 2007. As per the production sharing contract (PSC) for the block, the company has to spud the wells in two different stages.

Looking for relief

RIL is expecting relief under the drilling moratorium for a period of about three years for deepwater areas being considered by the Petroleum Ministry, in view of the global shortage of deepwater rigs .

Currently, RIL has a fleet of four rigs including two deep/ultra deep water rigs and it has contracted for three deepwater rigs and one onshore rig for financial year 2009.

Apart from these, the company has also contracted for three more deepwater rigs, which are currently under construction.

At present, the two deepwater rigs of RIL are deployed in D6. It has a rig deployed in Gujarat Saurashtra block. The fourth rig, deployed in Mahanadi block, has moved and is expected to be taken to the West Coast.

KG-DWN-2001/1 (D9) block encompasses 11,850 sq km of the Krishna-Godavari basin. RIL is the operator for the block.

It had won the block in the third bidding round with Hardy Exploration Production (India) holding a 10 per cent participating interest.