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Close to $400 million was invested by Reliance Industries Ltd (RIL) in its shale gas joint venture (JV) projects in the US, during the three months ended June 30, 2011.
About $286 million of additional capital expenditure was made on RIL's project with Pioneer, $32 million on its project with Carrizo and $82 million on its project with Chevron, the company told analysts after the financial results of the first quarter.
There was “accelerated drilling and development activities” in the RIL-Pioneer JV project, the company said. “Two additional rigs were mobilised during the quarter and 20 additional wells were drilled during the quarter,” the presentation said, adding that 18 wells began production during the quarter.
The RIL-Pioneer JV is concentrating drilling in the liquid-rich areas of Eagle Ford in South Texas, US. The JV is producing 165 million standard cubic ft per day (mscfd) of shale gas and 13,800 barrels per day of condensate. RIL's share of gas production is 5.05 billion cubic ft. Production ramp-up is as per plan, said the company.
Additional wells
The RIL-Chevron JV drilled nine additional wells during the quarter. The JV's production rate from 22 producing wells stood at 51 mscfd during the quarter. RIL's share in the production during first quarter was 1.6 billion cubic ft of shale gas during the quarter. RIL added that the capacity is being ramped up cautiously by the RIL-Chevron JV.
RIL's JV with Carrizo is expected to commence production in the second half of the 2011-12 fiscal. The additional capital expenditure led to eight more wells being drilled during the quarter, taking total drilled wells to 10. “Pipeline construction is progressing as planned to help commence first sales,” the company said.
A total of over $2 billion has already been deployed as capital expenditure on these three joint venture projects. RIL's price realisation for shale gas averaged at $4.36/mmbtu based on the Henry Hub gas benchmark. For gas condensate, the price realisation averaged at $102/barrel during the quarter based on the WTI gas condensate benchmark price.
d.das@thehindu.co.in
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