Business Daily from THE HINDU group of publications
Sunday, Oct 14, 2007
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Business Daily from THE HINDU group of publications Sunday, Oct 14, 2007 ePaper |
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Petroleum Corporate - New Projects
RIL increased D6 capex from $2.47 b to $8.8 b. Concerns that it was done to inflate natural gas price from these fields. Co says its cost is among the cheapest in deepwater projects. Richa Mishra New Delhi, Oct. 13 The Government has appointed an international consultant to review Reliance Industries Ltd’s proposed increase in investment for the development of the Krishna-Godavari Basin D6 fields. The company’s move to hike what is known as field development plan from $2.47 billion to $8.8 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. Official sources told Business Line that a consultant was appointed on October 8, but declined to disclose the name of the company. The consultant has been given four weeks to submit its report. When contacted, the Directorate-General of Hydrocarbons (DGH) confirmed that a consultant has been appointed. The international consultants who were in the fray for the job include Mustang Engineering of US, Pajak Engineering of Canada, and Petrofac of UK. The management committee of the D6 block had earlier approved the proposal to increase the estimated capital expenditure from initial $2.47 billion to $8.8 billion. Since some apprehensions were expressed against this steep increase, the Petroleum Ministry had asked the DGH to appoint an independent consultant to assess the hydrocarbon reserves and FDP of RIL’s block. The role of a management committee is to approve activities of the project and see whether it is commercially viable or not, sources said. The management committee-approved capex is finalised after official auditing. 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. Reserves doubleThe 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. Ministry for independent consultant for RIL’s D6 block Reliance gets approval for oil production in K-G basin D6 gas block: RIL says it has permission to retain entire area More Stories on : Petroleum | New Projects | Reliance Industries Ltd | Consulting
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