RIL likely to receive approval for $1.5 billion investment in KG basin

<p>The energy rich Krishna-Godavari basin, controlled and developed by Mukesh Ambani led Reliance Industries Limited (RIL), may receive a fresh set of investment following a likely approval from the government for further development of the acreage.</p>
<p>Reliance Industries officials had submitted a proposal to the KG-D6 oversight committee which cited development of four additional satellite fields in the in KG-D6 block, namely Dhirubhai-2, 6, 19 and 22 (D-2, D-6, D-19 and D-22) fields. These fields border the currently functional and gas producing fields – D-1 and D-3. It has been estimated that the prospective satellite fields have the potential to generate 10 million cubic meters of gas output per day by the year 2016. This will greatly help shore up the output from the KG block which has seen its output decline over the last 15 months. The KG-D6 oversight committee, which comprises of officials from the oil ministry and its technical arm – the Directorate General of Hydrocarbons (DGH), is expected to meet tomorrow to deliberate over the approval of the field development plans (FDP).</p>
<p>RIL had initially submitted a FDP in 2008 for development of nine satellite gas discoveries, including D-2, D-4, D-6, D-7, D-8, D-16, D-19, D-22 and D-23, with an estimated capex of $5.6 billion and reserves of 1,708 billion cubic feet (bcf). A more efficient development plan for four of these satellite gas fields was later submitted in 2009. The KG-D6 oversight committee directed RIL to revise the proposal according to new rates and current prices. But in order to avoid potential losses, Reliance Industries modified the plans to restrict spending on the four satellite fields to about $1.529 billion, plus or minus 15 percent.</p>
<p>So far, eighteen discoveries have been made by RIL in the KG basin, located off the east coast of Andhra Pradesh. Many of these finds have cited immense potential for prolific energy development plans. One such field is the D-24 blockor the R-Series gas field on which RIL plans to invest nearly $2 billion so as to produce about 15 mmcmd of gas. The field has gross in-place gas reserves of nearly 1.64 tcf.</p>