RIL's KG D6 Gas Development Project on track, Two New Wells indicate Potential Upside in the block

Mumbai, February 24, 2007: Reliance Industries Limited's (RIL) Exploration & Production Business currently comprises of 29 domestic blocks spread over 308,000 Sq. Km and four international blocks with an acreage of 41,788 Sq Km. Additionally, RIL has recently been awarded seven deepwater blocks-two in the KG basin and five in the Mahanadi basin-in the NELP VI round which have a combined acreage of 76,050 square kilometers.

On the international front, RIL has recently been awarded onshore blocks 34 & 37 in Yemen and a deepwater block 41 in Oman which have a combined acreage of 38078 square kilometers. The combined acreage of RIL's domestic and international businesses is 463940 square kilometers.

RIL has outlined an aggressive exploratory program over the next four quarters to exploit its current acreage. Drilling is proposed in 14 out of the 29 blocks coupled with extensive seismic studies in all the blocks. To achieve this, rigs have been contracted and seismic contracts have been awarded.

In the current quarter, RIL has successfully completed the drilling of wells KG-D6-AA1 and KG-D6-Q1 in the deepwater block KG-DWN-98/3 (KG-D6). The well KG-D6-AA1 was located in the new 3D seismic area at a water depth of 1858 m and drilled to a depth of 2862m. The well KG-D6-Q1 was located at a water depth of 1832m and drilled to a depth of 2945m. The Q1 well is approximately 15 kilometres southwest of AA-1 and 8 kilometres northwest of the P1 natural gas discovery.

Both the wells have encountered pay zones in the distal part of the earlier established channel levee systems in the KGD6 block. Based on the evidence of data obtained from logging & Modular Dynamic Testing (MDT), the clastic reservoirs in the above sequences proved the occurrence of hydrocarbons in both the wells and demonstrate the continued high prospectivity of the block as drilling progresses into the southern areas of the block. These events have been notified to DGH. Further, drilling of the well KG-D6-P2 is in progress.

Essentially all of D6 is now covered with 3D seismic. Processing and integration of the surveys has been completed.

RIL's development of the gas discoveries Dhirubhai 1 and Dhirubhai 3 is on schedule for production and supply of gas by 2008. To this effect, all major EPC/EPIC contracts have been awarded and all long lead items have been ordered. The pre-engineering survey for offshore installation has been completed. Currently, the project is in the fabrication phase and well on schedule to meet the target installation and commissioning dates. The construction jetty has been completed. Detailed engineering of the onshore terminal is nearly 50% complete.

As a part of our KG D6 development drilling program, recently three additional development wells A9, A16 and B13 have been drilled. These wells have reaffirmed our reserve expectations from Dhirubhai 1 and Dhirubhai 3. Orders have been placed for well completion equipment and services.

In the cretaceous section of D6 Block, the MA-2 well has encountered the thickest hydrocarbon column discovered to date in D6. MA-2 reached a depth of 3,581 metres and penetrated a gross hydrocarbon column of 194 metres consisting of 170 metres of gas/condensate (53º API) and 24 metres of oil (42-43º API). MA-2 is located approximately 2 kilometres from the MA-1 discovery well.

Fast track development of KG-D6 MA Cretaceous oil discovery has been planned for production to be on-stream during 2008. The commerciality of MA oil discovery has been approved by DGH on 1st February 2007. Currently, the development plan is being conceptualised.

Source : Equity Bulls

Keywords