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| RIL-Niko invest $5.98 bn in KG-D6: Deora |
| Press Trust of India / New Delhi Jul 27, 2009, 17:42 IST |
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Reliance Industries (RIL) and its Canadian partner Niko Resources have invested $5.98 billion in the oil and gas fields in the Krishna Godavari basin block D6, Petroleum Minister Murli Deora said today.
RIL-Niko plan to invest $8.8 billion to develop the Dhirubhai-1 and 3 gas fields, first two of the 18 oil and gas discoveries made in the block KG-DWN-98/3 or KG-D6.
"Reliance and Niko have invested $5.98 billion up to March 2009 for the development of two major natural gas discoveries and one crude oil discovery," he said.
KG-D6, he said, was currently producing about 31 million standard cubic meters per day of gas (mmscmd), which accounts for 25 per cent of the total natural gas production of the country.
Crude oil production from the block is around 13,500 barrels per day (0.67 million tonnes per annum), which is about 1.9 per cent of the total crude oil production of the country.
"On achieving peak production of 80 mmscmd from this block, natural gas production of the country would double compared to the production during 2008-09," Deora said.
"Crude oil production from this block would reduce the import bill to the extent of oil production from the block and natural gas production would reduce the existing demand." he added.
Deora said in the Rajya Sabha the government has received a payment of $0.51 million towards its share of profit petroleum on commercial production of crude oil from KG-D6.
To a separate question, he said the government had directed the Directorate General of Hydrocarbons to appoint an independent and internationally renowned consultant to examine the cost estimates.
Eminent consultant and reservoir engineer Dr P Gopalakrishnan and Mustang Engineering of US, an internationally reputed engineering consultancy company, have submitted their reports. "Both the reports validate the cost estimates made by RIL-Niko," he said.
Minister of State for Petroleum and Natural Gas Jitin Prasada said an Empowered Group of Ministers (EGoM) had in 2007 approved a price formula for the KG-D6 gas.
Based on this formula the current gas price works out to $4.20 per million British thermal unit at a crude price greater or equal to $60 per barrel.
"The EGoM while approving the price formula took into account the prices obtained by the producer/contractor (RIL-Niko) from the market through a tendering process. It also considered the interest of various stakeholders including those in the power and fertilizer sectors," he said.
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