RIL gets 4th-time lucky in gas find

MUMBAI: Reliance Industries Ltd (RIL) on Tuesday confirmed its oil and gas discovery in the Cauvery basin, probably making it the country’s biggest gas producer.

RIL struck gold once again under water when it discovered the presence of hydrocarbon in the east coast in the Cauvery basin, at its very first attempt at this ultra deep water basin last week.

“Intelligent use of process, people and technology coupled with commitment and belief of a possible discovery led us to the find,” said P M S Prasad, president and chief executive officer of the company’s petroleum business.

Located around 60 km off the Pondicherry coast, the site gave signs of a prospective discovery of hydrocarbons when oil and gas oozed out at a flow rate of 1,000 barrels and 30 million standard cubic metres per day respectively.

“Over a total deep water acreage of 100,000 sq kms of the Cauvery basin, which had four blocks under the Phase I of NELP VI, hydrocarbon presence was discovered in the very first well,” said Prasad. The well is situated in 14,325 sq kms awarded to RIL, at approximately 1,200 metres below the sea level.

“The well was located in a water depth of 1,185 metres and was drilled to a target depth of 4,081 metres further and then terminated,” he said. Another zone tested below the main zone produced around 550 barrels of oil per day with one million standard cubic feet of gas.

This discovery, namely ‘Dhirubhai - 35’ had been notified to the Centre and Directorate General of Hydrocarbons (DGH). Though he did not say whether the new find could be of similar magnitude to the Krishna-Godavari (KG) basin, Prasad said “it has potential.”

On KG basin, Prasad said production would start sometime in the mid of 2008, while for the Mahanadi basin, RIL would be submitting a development plan to the government in the next two weeks.

Though Prasad and his team seemed elated while announcing the discovery, he expressed concern at the sharply rising costs in the exploration and development business and supply chain constraints, especially the unavailability of rigs.

“The unavailability of rigs has forced us to prioritise things and we are focussing more towards development than exploration. This was delaying exploration activity to some extent,” he said.

Currently, RIL has three rigs and had to transfer one of them from the K-G basin for its activity in the Cauvery Basin. The company plans to acquire 7 to 8 rigs by early next year and majority would be deployed in the prospective east coast.

Out of these, four of them would be capable of deep water exploration. He said that though under the Phase I, which closed on April 2007, RIL had to drill three out of the four blocks in the Cauvery basin, but could manage only one because of the rig crunch.

However, with government proposing to merge the phase I and II, it would be easier for the company to achieve the desired results in the stipulated time.

Relying on its technology and commitment towards discovery, Prasad seemed upbeat about the prospects of the other blocks in the basin. Though he declined to comment on the number of blocks, it seemed that the company was eyeing a mammoth share in the NELP VII round.

Noted petroleum geologist, Wallace Pratt’s quote “Oil is first found in the mind” was echoed by Prasad. That was in response to queries on how RIL manages to strike gold with amazing regularity, while some public sector firms fail.