India’s largest private sector company, Reliance Industries Ltd., said it began producing crude oil from its KG-D6 block of the Krishna Godavari Basin on Sept 17, confirming media reports. Initial production levels are at 5,000 barrels of crude per day. Peak hydrocarbon production of 550,000 barrels of oil equivalent per day (boepd) is expected over the next six to eight quarters, the company announced at a press event over the weekend.
‘India’s current hydrocarbon oil and gas production is 1.3 million boepd. With Reliance’s contribution in the energy sector, India’s indigenous production of hydrocarbons will increase by over 40 percent in the next 18 months,’ chairman and managing director Mukesh Ambani told reporters.
The energy and petrochemicals major estimated that the production from KG-D6 facility will save India an annual foreign exchange outflow of $20 billion.
The KG-D6 block in Krishna Godavari basin is located in the Bay of Bengal, off the coast of eastern state of Andhra Pradesh. RIL holds 90 percent participating interest and Niko Resources Ltd. holds the balance.
P.M.S. Prasad, president and chief executive, oil & gas at RIL said Hindustan Petroleum Corp. Ltd. (HPCL) and Chennai Petroleum Corp. Ltd., have sent in bids for buying the crude. Prasad added the contracts with HPCL are likely to be more of spot contracts.
Mukesh and Nita Ambani with jars of crude oil from the Krishna Godavari basin
Prasad said: ‘We will be going in a next few days to gas productionStarting from January we will be producing gas.’ Mukesh Ambani’s RIL and Reliance Natural Resources Ltd. (RNRL), which is owned by estranged brother Anil Ambani, have been entangled in a legal battle which is centered on the pricing of gas from the KG Basin.
News courtesy: Forbes