Reliance Industries finds oil in Krishna basin

MUMBAI: Reliance Industries said on Saturday that it has struck oil in the waters of the Krishna basin in yet another sign of the growing hydrocarbon potential waiting to be tapped in the deep waters off the country’s east coast.

India’s largest private sector company, whose discoveries have made the east coast a rich hunting ground for oil and gas companies, said that the commercial viability of the discovery is being evaluated.

DGH sources confirmed this discovery but declined to comment on its commercial viability. The deepwater block was awarded to RIL during the first round of NELP bidding. RIL holds 100% participating interest in this block, which spans an area of 8100 square kilometres.

This is Reliance’s second major oil discovery in the offshore blocks off the east coast. It has struck oil in the Krishna-Godavari basin block of D-6. The firm has been pretty successful in its exploration efforts in the east coast. Its strike for discoveries is about 62% while in deep waters alone, the success rate is about 79%.

In 2002, the firm reported the biggest gas discovery of that year in the KG-D6 basin. The gas reserves are estimated at about 11.3 trillion cubic feet though RIL’s partner Niko Resources believes that they are much higher at about 35.4 trillion cubic feet.

RIL shares have had a record-breaking run in the past few weeks. They ended 3.75% up at Rs 2,274.40 on Friday after touching an all-time high of Rs 2,294. The shares have more than doubled in the past one year.

“The block KG-DWN 98/1 (D-4) encountered clastic reservoir with gross oil column of more than 20 meters in the Mesozoic section. During the Drill Stem Testing (DST), the well flowed 596 barrels of oil per day (BOPD),” the company said in a press release on Saturday. ET reported early this month about RIL’s first oil discovery in the Krishna basin.

Reliance says that the well was located in the water depth of 565 meters and was drilled to the target depth of 3595 meters. The discovery has been christened as Dhirubhai 36 and has been notified to the government and the upstream regulator, The Directorate General of Hydrocarbons (DGH).

This discovery comes at much needed time as the extension period for this block was likely to end soon, following which RIL would have had to relinquish the block. In July, RIL announced discovery of oil and gas in the Cauvery basin, which had a flow rate of 1000 bopd and 30 million cubic feet (mcf) of gas.

Reliance Industries is now in process of bringing its largest discovery of gas in 2002 to commercial production by June 2008 with investment of $5.2 billion to develop and $3.5 billion to maintain the production level from the block.