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Reliance Industries Ltd (RIL) has set its eyes on the “wild cat” Cauvery-Palar offshore to quench its hydrocarbons thirst.
RIL, which has been drawing flak for tapering gas output from the D6 gas fields, the country's biggest gas field, has started exploratory drilling work in three deepwater blocks in the Cauvery-Palar region.
While in one block PR- DWN-2001/1 the company is drilling the third well, in the other two blocks – CY-PR-DWN-2001/3 and CY-PR-DWN-2001/4 – it will be RIL's first attempt. The two wells (first drilled in 2010 and the second in January 2011) drilled in PR-DWN-2001/1 have been dry.
RIL has started its search for hydrocarbons in the other two blocks along with the ongoing activity in PR-DWN-2001/1 about a month ago, sources in know of the developments told Business Line .
Based on the strike rates in these wells, the company will assess the quantum of hydrocarbons and their commercial viability, sources said adding that it will take a couple of months.
100% stake
All these three blocks, where RIL has 100 per cent stake, have been won under the third round of the New Exploration Licensing Policy (NELP). Blocks in the Cauvery-Palar region are called “wild cat” blocks in the exploration industry as they are located in new frontier areas, sources explained. Drilling a deepwater well costs close to $100 million.
This is not the first attempt by RIL in the region. The first success was in the CY-DWN-2001/2 (CY-III-D5) block where RIL had struck both oil and gas. The first zone had 550 barrels a day of oil and one million cubic feet a day of gas, while in the second zone the company found 31 million cubic feet a day of gas and 1,200 barrels a day of condensate.
As on date, RIL has 29 oil and gas blocks, and has made 51 discoveries (both commercial and non-commercial) including overseas properties.
BP partnership
Recently, RIL has struck a partnership with BP, wherein the British major will take a 30 per cent stake in 23 oil and gas production sharing contracts including the KG D6 block that Reliance operates in India. BP will pay RIL an aggregate consideration of $7.2 billion for acquiring interests. Future performance payments of up to $1.8 billion could be paid based on exploration success that results in development of commercial discoveries.
The companies are awaiting a nod from the Ministry for Petroleum & Natural Gas to firm up the deal. BP can bring in its expertise in deepwater exploration which would help RIL in its hydrocarbon search.
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