Oil & Gas Industry in India

Reliance Industries contributes to highest rise in gas production worldwide

2010-07-16T04:43:00.000-07:00

India recorded the highest rise in natural gas output worldwide in 2009 after Reliance Industries’ eastern offshore KG-D6 field came into production, Economist Christof Ruhl said.

Mukesh Ambani-run RIL began gas production from the Krishna-Godavari basin in April, 2009, and its 60 million standard cubic metres per day output led to a 75 per cent jump in natural gas availability in the country to 140 mmscmd.

“Last year, India had the highest increase in production of natural gas worldwide. And I just checked, it also had the highest corresponding increase in consumption in natural gas worldwide,” BP Plc Group Chief Economist Christof Ruhl said. The jump in natural gas production in India was possible because the government allowed private sector firms to take a lead in exploration for hydrocarbons.

“When you look at countries where gas production is heavily government-controlled, like Russia, they had the biggest decline in gas production and consumption,” he said. “When you look at countries where new technologies have been developed like unconventional shale gas in the US... it was because they have an investment environment which is very competitive,” he said. Shale gas, trapped in sedimentary rocks, is said to hold the potential of doubling gas output in US.

Ruhl said that it was very clear who was left behind, as countries where natural resources were tightly controlled were less flexible.

Source: Economic Times

RIL makes sixth oil discovery in block CB–ONN–2003/1

2010-06-11T06:00:00.001-07:00

Reliance Industries Limited (RIL) announced its sixth oil discovery in exploratory block CB-ONN-2003/1 (CB 10 A&B), awarded under the NELP-

V round of exploration bidding.

The well CB10A-T1 was drilled to a total depth of 1500 meters in Part A of the block, with the objectives of exploring the play fairway in the Miocene Basal Sand (MBS) of Babaguru Formation as well as the Oligocene play of Tarapur Formation. The Hydrocarbon bearing zone was identified from 1390-1402.5m in the Miocene Basal Sand (MBS) of Babaguru formation. Conventional production testing was carried out in the interval 1390-1395 m. The well flowed at a rate of 415 barrels of oil per day (bopd), through a 6-mm bean with a flowing tubing head pressure of 290 psi.

The discovery is significant as this play fairway is expected to open more oil pool areas, leading to better hydrocarbon potential within the block. The block CB-ONN-2003/1 is located at a distance of about 130 kms from Ahmedabad in Gujarat, in the Cambay basin. The block covers an area of 635-sq km in two parts, viz. Part A & Part B. RIL, as Operator, holds 100% Participating Interest (PI) in the block.

While the entire block was covered with 2D seismic, about 80% of the block area has 3D seismic coverage. Of the 16 exploratory wells drilled in the block by RIL so far, 12 are located in Part-A and the remaining 4 in the Part B of the block. RIL is continuing further exploratory drilling efforts in the block.

The discovery, named ‘Dhirubhai–49’, the sixth oil discovery in the block so far, has been notified to the Government of India, and to the Directorate General of Hydrocarbons. The potential commercial interest of the discovery is being ascertained through additional data gathering and analysis.

The discovery supplements the understanding of the petroleum system in the Cambay basin in general, and the block in particular. Based on the interpretation of the acquired

3D seismic campaign in the contract area, several more prospects with upside potential have been identified at different stratigraphic levels.

Source:http://news-views.in/ril-makes-sixth-oil-discovery-in-block-cb%E2%80%93onn%E2%80%9320031/

RIL seeks clarification on gas utilisation policy

2010-05-27T07:33:00.000-07:00

Even as India Inc and the government rejoices over the settlement between Mukesh Ambani and Anil Ambani, it seems like the drama is not over yet. NDTV has learnt that Mukesh Ambani-led Reliance Industries now wants the government to clarify its gas allocation policy before it begins talks with RNRL over gas supplies.

For this the company has already sent feelers to the empowered group of ministers (EGoM) members seeking further clarity, sources said.

Sources said RIL has informed the government that there is no room for re-negotiation as per the government’s current gas utilisation policy.

Sources close to the development also say that RIL wants the government to play a significant role in renegotiations with RNRL. When contacted, RIL declined to comment on the news.

The Supreme Court had on May 7 rejected Anil Ambani Group firm RNRL's claim for cheap gas from RIL as had been decided in a private family agreement of 2005. The apex court had directed the two companies to rework gas supply pact keeping the government's pricing and utilisation policy in mind.

RIL and RNRL are likely to meet formally next week for renegotiations on the family pact that provided for Anil Ambani firm getting 28 million cubic meters per day of gas for 17 years.

Source:http://news-views.in/ril-seeks-clarification-on-gas-utilisation-policy/

Ambanis to reach gas deal in 2 weeks

2010-05-27T07:28:00.000-07:00

Energy major Reliance Industries and Reliance Natural Resources Ltd will reach a gas supply agreement in the next two weeks, taking forward a patch-up between the billionaire Ambani brothers the Economic Times reported on Thursday.

The agreement, being negotiated between officials of the two companies, aims for Mukesh Ambani-controlled Reliance Industries to supply gas for 10 years from 2012 to power plants run by his younger brother Anil, the newspaper said, without saying where it got the information from.

After five years of a bitter feud that split India's richest family, the brothers had unexpectedly called a truce on Sunday by ending a non-competition agreement that was a source of acrimony between them.

Earlier this month Anil lost a Supreme Court battle with Mukesh in a gas pricing dispute, with the court ordering the brothers to renegotiate within six weeks a private natural gas supply contract and gave the government control over setting gas prices.

The Economic Times said there was a possibility that Reliance Industries may pick up significant minority stakes in gas-based power plants owned by Anil Ambani's group.

A spokesman for Reliance Industries said he had no comment on the report, while Anil Dhirubhai Ambani Group could not be immediately reached.

Source:http://news-views.in/ambanis-to-reach-gas-deal-in-2-weeks/

Trouble for Transocean: RIL dumps KG-basin rig

2010-05-26T07:01:00.000-07:00

Reliance Industries has suspended drilling of a well in its D3 block in the Krishna Godavari basin, as the rig, which was on hire from Transocean, developed problems.

A drillship of Transocean deployed in the Gulf of Mexico had exploded last month, causing a huge oil leak.

Hardy Oil and Gas, which is RIL’s partner in the KG-D3 block said there were “unresolved mechanical issues” with Transocean’s rig “Deepwater Expedition” which was drilling an exploration well in the block. RIL, which is the operator, holds the majority 90 per cent stake in the KG-D3 block; Hardy holds the rest.

“The KGV-D3-W1 exploration well (in D3 block) has been temporarily suspended due to unresolved mechanical issues associated with the blow out preventer (BOP) of the deepwater expedition drilling rig,” Hardy Oil said in a statement.

Hardy CEO Yogeshwar Sharma said: “In the interest of safety, the D3 joint venture has taken the considered decision to suspend the W1 well. The operator — RIL — is working towards mobilising an alternative rig at the earliest.”

The well, Hardy, said, will be re-drilled using an alternative deepwater rig. It did not say what would be the fate of deepwater expedition drilling rig.

A Reliance Industries spokesperson refused to comment on the issue.

US-based Transocean's Deepwater Horizon had exploded on April 20, killing 11 people and causing a leakage in a well leased by British Petroleum (BP).

PMS Prasad: we'll make an effort to reach out to RNRL

2010-05-21T07:39:00.000-07:00

RIL executive director PMS Prasad, a long-serving hand since the late 1980s, has been the company’s public face all through the gas battle — whether at Court Room No 1 at the Supreme Court, or the corridors of Shastri Bhavan that houses the petroleum ministry. Prasad was present on Friday too as the drama was about to be capped in the Supreme Court. ET caught up with him immediately after the judgement

What is it that came to your mind when the judgement was announced?

Relief! That it’s all over.

Who was the first to congratulate you after the judgement?

My boss Mukesh Ambani. He said it was a good job done and we need to get back to work. I also got a call from Mrs Ambani, who said we have to move on to the next generation of value creation.

How is Monday 9 am going to be different?

It’s going to be a different day. We are relieved of the tension. We have to get down to business and begin negotiations with RNRL.

Is this the best judgement?

Under the given circumstances, one could not hope for a better judgement.

How do you plan to go about negotiating the agreement with RNRL?

We have to negotiate a fresh gas sale and purchase agreement, which has to be bound by the broad parameters laid down by the court. Any fresh gas sales purchase agreement will have to uphold the price approved by the government, honour the utilisation policy of the government and various empowered Group of Ministers’ (eGoM) decisions with regard to utilisation.

What are the parameters that you will need to thrash out with RNRL?

The issues will include other parameters of GSPA like liability, penalty, alternative arrangements for fuel, the quantity of gas, quality of gas, etc. We have already concluded GSPA with several consumers and this GSPA will have to be similar to those.

Did the court mention the family MoU?

Yes. Although the court held the production-sharing contract was supreme, it directed RIL & RNRL to renegotiate in the context of the existing MoU; more like the MoU being a backgrounder under which we could renegotiate. But at all times, it is the supremacy of the PSC and the government decision that have to be kept in mind.

How long will you have to reach that agreement — do you have a timeframe?

We have to go back to the Mumbai HC within six weeks and then if we can mutually agree to a GSPA, it will need to be verified and approved by the government.

Are you saying RNRL & RIL can possibly be business partners where RIL is the gas seller and RNRL the buyer?

Yes! There is every possibility that we will work as partners and we will make a genuine effort to reach out and settle this GSPA in accordance with the court order and government law.

So, what is clear is that you are willing to provide gas at $4.2 mmBtu if the government approves the contract.
Yes, that is the price we will start negotiations at.

What are the key takeaways of today’s verdict?

It is clear that we have to follow all government policies and eGoM decisions and the PSC is the basis for all contracts. Secondly, the court order has also made it clear that the government has the right to determine prices and allocate the gas as per national interests. It has in a way only reaffirmed what the government has been saying. Thirdly, by directing us to renegotiate, but referring to the family MoU, the court has asked both RIL and RNRL to initiate talks and take action within six weeks.

How do you think this order will be received by investors, particularly global oil majors?

We expect the government to come out with a clear policy, which will state all that the verdict has said so that investors have complete confidence in consistency of policies. If companies like Exxon, Chevron and Shell can go to countries like Nigeria or Venezuela where there is so much political uncertainty, there is no reason why investors should not come to India.

Any regrets?

Yes. Too much time was wasted. There is not a single decision that the government has taken in the last seven months. And institutions like the Director General of Hydrocarbons, the petroleum ministry and even the CAG have suffered a huge reputation damage. And as for the advertisements in the newspapers where it was said that the petroleum minister was in RIL pockets.(laughs) I constantly looked for him but didn’t find him. We need to get back to business, value creation and positive thinking.

Source: http://news-views.in/pms-prasad-well-make-an-effort-to-reach-out-to-rnrl/

Ambani Gas Row: Government emerges triumphant!

2010-05-07T06:55:00.001-07:00

Two judges of a three-member bench delivered separate verdicts on the ongoing Ambani gas row between Mukesh Ambani's Reliance Industries and younger brother Anil's Reliance Natural Resources. The case involves terms of a deal under which Reliance Industries was to supply Anil Ambani's Reliance Natural with 28 million standard cubic metres a day (mmscmd) of gas for 17 years at a rate below the government price.

Reliance Industries CMD, Mukesh Ambani had argued the private deal cannot take precedence over government policy, which determines who can receive gas and at what price.

RNRL’s Anil Ambani, who claimed otherwise, rolled out a series of front-page advertisements in major newspapers accusing the government of taking the side of Reliance Industries.

Agreeing with RIL’s argument, the Chief Justice of India issued a final verdict that said a memorandum of understanding between the two brothers signed in 2005 is not binding on RIL, a government contract over-rides all private agreements. SC has asked both brothers to sit down and re-negotiate the gas supply master agreement (GSMA) and then come back to the Court in 6 weeks. The verdict further said that gas is a national asset and belongs to the government till delivered to the consumer. The court said it will give its direction in 8 weeks.

The verdict means that the re-negotiation has to take place within the ambit of the government’s policy. Further the judgement adds that the government regulation must dictate the renegotiation plan and RIL and RNRL should renegotiate under government rules.

Minutes after the Supreme Court declared the verdict in favour of RIL, in the Ambani Gas Row, Oil Minister Murli Deora welcomed the move and called it a vindication of the Govt's stand. "The Govt is satisfied with the verdict. The Govt has the power to decide the price of gas and the power to allocate."

Oil Secy S Sundareshan added, "Right from the beginning, the Ministry has been saying that gas is the property of the nation, and we believe the court has upheld the terms of the Production Sharing Contract."

"Now there is complete clarity on gas policy and the decision of the Bombay High Court has been quashed. We will continue to regulate gas pricing and policy in future." However, he also said that he was unaware of what has to be renegotiated in the case.

Source:http://reliance-news.blogspot.com/2010/05/ambani-gas-row-government-emerges.html

Mukesh Ambani’s points were in line with Supreme Court verdict

2010-05-07T06:54:00.001-07:00

India's top court has given a unanimous verdict today on the Ambani gas row upholding the government’s right to determine gas-pricing. The Supreme Court had finally given a judgment on the gas-pricing dispute between the Ambani brothers that has raised concerns over the government policy on gas pricing for India’s upcoming energy based economy and rattled investors.

The verdict delivered by Judge Sathasivan and supported by all others with Reddy disagreeing only on one minor point. The case in the Supreme Court was heard by a three-judge bench. Two of the judges have delivered separate verdicts and majority opinion prevailed. This judgment is based on the basic fact the gas is a public good and belongs to the government and its people.

Mukesh Amabani’s point that he could not go against the government’s Production Sharing Contract has been re-iterated by the government. As an extension of the judgment Anil and Mukesh Ambani have been given six weeks to renegotiate the contract that forces RIL to sell gas to RNRL. The judge said that a government contract over-rides all private agreements and the memorandum of understanding between the two brohers signed in 2005 does not stand.

The Chief Justice has signed the verdict on the RIL RNRL gas row delivered by Justice Sathasivan. The verdict says that both brothers must sit down and re-negotiate the gas supply master agreement (GSMA) and then come back to the Court in 6 weeks. The verdict further said that gas is a national asset and belongs to the government till delivered to the consumer. The court said it will give its direction in 8 weeks.

The previous MoU has stood to be in contradiction with the government policy as well as the Production Sharing Contract. The re-negotiated agreement between RIL and RNRL will have to be reworked within the ambit of the government’s gad pricing policy. Further the judgment adds that the government regulation must dictate the renegotiation plan and RIL and RNRL should renegotiate under government rules.

Source:http://www.reliance-news.com/mukesh-ambani/mukesh-ambani%E2%80%99s-points-were-in-line-with-supreme-court-verdict/

NTPC may sign for additional KG-D6 gas

2010-04-23T06:26:00.001-07:00

State-run power producer NTPC is likely to sign contracts next week to buy an additional 1.51 million cubic meters a day of gas from Reliance Industries at government-approved price of $4.2 per mmBtu.

The additional gas would be used at NTPC's Anta and Auriya plants in Rajasthan, Dadri unit in Uttar Pradesh and Faridabad plant in Haryana, official sources said.

Since these plants have already signed Gas Sales and Purchase Agreements (GSPA) for volumes totaling 1.81 mmcmd, only side-letters need to be signed for additional gas.

Sources said side-letters may be signed next week.

This follows Power Ministry's ultimatum to NTPC to sign contracts immediately. While the government had allocated 4.46 mmcmd of gas from RIL's eastern offshore KG-D6 field, NTPC has so far signed only for 1.81 mmcmd.

At a recent review of gas withdrawal from RIL's eastern offshore KG-D6 fields, it was informed that the government had allocated 31.1 mmcmd gas to power sector on firm basis and an additional 12 mmscd on fall back or temporary bais. Against this, only 30.11 mmcmd was been drawn by the power utilities.

It was stated at the meeting that if the power utilities continue to draw less quantity of gas than what has been allocated, there is a possibility that the unutilised gas is allocated to other sectors, they said.

Of the 4.46 mmcmd allocated to NTPC, 2.65 mmcmd was for its Kawas and Gandhar power plants in Gujarat. But the state- owned firm did not want to use KG-D6 gas at these plants since it was in litigation with the Mukesh Ambani firm over fuel supplies to expansion projects planned at these sites.

So, an Empowered Group of Ministers (EGoM) last year decided that the state gas utility GAIL India will swap KG-D6 gas with fuel from other fields. Under this scheme, gas from western offshore Panna/Mukta and Tapti (PMT) fields that was currently supplied to NTPC's northern India plants, was to be diverted to Kawas and Gandhar. The deficit at the northern India plants was then to be made up by KG-D6 gas.

But since PMT gas supplies to NTPC's northern plants was only 1.51 mmcmd, a swap of only that volume has been affected.

Sources said GAIL has decided that 1.51 mmcmd of PMT gas that is currently being supplied to NTPC's northern power plants would be diverted to Kawas and Gandhar. The northern plants will then be supplied KG-D6 gas.

NTPC currently buys 0.79 mmcmd of KG-D6 gas at its Anta, 0.54 mmcmd at Dadri, 0.26 mmcmd at Auriya and 0.22 mmcmd at its Faridabad unit.

With the swap, supplies would go up to 3.31 mmcmd.

RIL currently produces 63-64 mmcmd of gas against a potential of 80 mmcmd as government nominated customers like NTPC are yet to offtake their full allocated quantity.

Source:http://www.business-standard.com/india/news/ntpc-may-sign-for-additional-kg-d6-gas/92099/on

Reliance profits to rise with higher output from KG

2010-04-22T07:16:00.001-07:00

Energy major Reliance Industries should post a second straight increase in quarterly profit, lifted by higher gas output from fields off India's east coast and a nascent recovery in refining margins.

India's leading listed conglomerate, controlled by billionaire Mukesh Ambani, has been scouting for acquisitions overseas, and progress on that front will determine its outlook. Reliance, valued at $78 billion, recently said it would pay $1.7 billion to form a joint venture at one of the most promising natural gas deposit regions in the United States with Atlas Energy.

The deal followed two failed attempts to buy overseas firms as Reliance looks to expand its presence outside India, break into new markets and broaden its businesses, which include refining, oil and gas exploration and petrochemicals.

"The company has already invested in its own projects such as its gas fields in India and is going to generate a lot of cash flow," said Deepak Pareek, an oil and gas analyst at Mumbai-based Angel Broking.

"A lot of that cash has to be pumped into overseas growth opportunities and that's exactly what it's done with Atlas." Bankers say more overseas deals could be in the offing. The outcome of a long-running gas dispute with Reliance Natural, led by Mukesh's younger brother Anil, will also have a bearing on the company's outlook.

Reliance is unable to hit peak gas production of 80 million standard cubic metres a day (mmscmd) at its D6 block in the vast Krishna Godavari basin in the Bay of Bengal due to customers not buying allocated volumes, and a lack of pipelines. But analysts say current production of 63-64 mmscmd is still enough to boost results.

Reliance began pumping gas from the block in April last year. Analysts estimate gross refining margins (GRMs), a key measure of profitability, will have dropped about 16 per cent year-on-year in the March quarter to $8.30 a barrel, tracking a decline in Asia's benchmark Dubai crack margin.

Reliance GRMs nearly halved to $5.90 a barrel in the December quarter. The company's results will be helped by its acquisition last year of unit Reliance Petroleum. State-run explorer Oil and Natural Gas Corp is expected to post higher earnings on firmer oil prices, but subsidy payouts the group is required to make to state retailers will keep results muted.

A lack of clarity about the government's subsidy rules means analysts estimates for ONGC are often disparate. "What you'd want to bet on is a company's business or its management decisions," said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services. "But here you are betting on whether a government policy will change or not, which just can't be figured out." Energy major Reliance Industries should post a second straight increase in quarterly profit, lifted by higher gas output from fields off India's east coast and a nascent recovery in refining margins.

India's leading listed conglomerate, controlled by billionaire Mukesh Ambani, has been scouting for acquisitions overseas, and progress on that front will determine its outlook. Reliance, valued at $78 billion, recently said it would pay $1.7 billion to form a joint venture at one of the most promising natural gas deposit regions in the United States with Atlas Energy.

The deal followed two failed attempts to buy overseas firms as Reliance looks to expand its presence outside India, break into new markets and broaden its businesses, which include refining, oil and gas exploration and petrochemicals.

"The company has already invested in its own projects such as its gas fields in India and is going to generate a lot of cash flow," said Deepak Pareek, an oil and gas analyst at Mumbai-based Angel Broking.

"A lot of that cash has to be pumped into overseas growth opportunities and that's exactly what it's done with Atlas." Bankers say more overseas deals could be in the offing. The outcome of a long-running gas dispute with Reliance Natural, led by Mukesh's younger brother Anil, will also have a bearing on the company's outlook.

Reliance is unable to hit peak gas production of 80 million standard cubic metres a day (mmscmd) at its D6 block in the vast Krishna Godavari basin in the Bay of Bengal due to customers not buying allocated volumes, and a lack of pipelines. But analysts say current production of 63-64 mmscmd is still enough to boost results.

Reliance began pumping gas from the block in April last year. Analysts estimate gross refining margins (GRMs), a key measure of profitability, will have dropped about 16 per cent year-on-year in the March quarter to $8.30 a barrel, tracking a decline in Asia's benchmark Dubai crack margin.

Reliance GRMs nearly halved to $5.90 a barrel in the December quarter. The company's results will be helped by its acquisition last year of unit Reliance Petroleum. State-run explorer Oil and Natural Gas Corp is expected to post higher earnings on firmer oil prices, but subsidy payouts the group is required to make to state retailers will keep results muted.

A lack of clarity about the government's subsidy rules means analysts estimates for ONGC are often disparate. "What you'd want to bet on is a company's business or its management decisions," said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services. "But here you are betting on whether a government policy will change or not, which just can't be figured out."

Source:http://reliance-news.blogspot.com/2010/04/gas-sales-to-lift-reliance-results-m.html

Reliance’s transport tariff on KG approved

2010-04-20T06:32:00.000-07:00

Oil regulator PNGRB today approved the tariff that Mukesh Ambani-owned East-West pipeline will charge for transporting gas from Reliance Industries' eastern offshore KG-D6 fields to users.

Against a levelised (or average) tariff of Rs 53.64 per million British thermal unit sought by Reliance Gas Transporation and Infrastructure Ltd, majority owned by RIL Chairman Mukesh Ambani, the Petroleum and Natural Gas Regulatory Board (PNGRB) today approved a provisional tariff of Rs 52.23 per mmBtu.

The Board, however, asked RGTIL to divide the Kakinada (in Andhra Pradesh) to Bharuch (in Gujarat) pipeline into three tariff zones as against two proposed by the company and apportion the levelized tariff.

RGTIL charged Rs 15 per MMBtu tariff for transporting gas in zone-1, i.e. Andhra Pradesh. For states between Andhra and Gujarat, it charged Rs 61.77 per mmBtu. The levelized or average of the two came to Rs 53.64 per mmBtu.

PNGRB's order asking RGTIL to have three zonal tariffs would mean that it will charge different transportation fee for ferrying gas to users in Andhra Pradesh, Maharasthra and Gujarat.

In effect, users in Maharasthra like the Dabhol Power Plant will have to pay less than those in Gujarat. Currently, users in both states pay the same tariff.

"The provisional initial unit natural gas pipeline tariff on levelized basis determined by the Board shall be Rs 52.23 per mmBtu with effect from the date of commissioning of the natural gas pipeline ie April 1, 2009," the PNGRB order said.

The difference between the tariff charged till now and that approved by the Board would be adjusted retrospectively with customers.

"The apportionment of the levelized tariff over all the tariff zone with detailed calculations will be submitted by the entity (RGTIL) for Board's approval within 10 days of the issue of this order," it said.

PNGRB said it will give the final tariff "once the audited cost and financial data" of the pipeline was available.

Source:http://economictimes.indiatimes.com/news/news-by-industry/energy/oil--gas/Oil-regulator-okays-Mukesh-Ambani-firm-pipeline-tariff/articleshow/5832477.cms

NTPC to buy 1.5 mmscmd more gas from RIL

2010-04-13T07:35:00.000-07:00

State-owned power utility NTPC will buy an additional 1.5 million cubic meters a day of gas from Reliance Industries at government-approved price of $4.2 per mmBtu to feed its power plants in north India.

The government had allocated NTPC 4.46 mmscmd of gas from RIL's eastern offshore KG-D6 fields but it currently draws only 1.81 mmscmd due to resistance from state gas utility GAIL to transport additional volumes, official sources said.

Close to 60 per cent of the allocated volumes were for NTPC's Kawas and Gandhar power plants in Gujarat. But the state-owned firm did not want to use KG-D6 gas at these plants since it was in litigation with the Mukesh Ambani firm over fuel supplies to expansion projects planned at these sites.

So, an Empowered Group of Ministers (EGoM) last year decided that the state gas utility GAIL India will swap KG-D6 gas with fuel from other fields. Under this scheme, gas from western offshore Panna/Mukta and Tapti (PMT) fields that was currently supplied to NTPC's northern India plants, was to be diverted to Kawas and Gandhar. The deficit at the northern India plants was then to be made up by KG-D6 gas.

Sources said GAIL was however not willing to implement this. It feared that if PMT gas was supplied to Kawas and Gandhar, it would displace the costlier LNG that those plants currently bought. Kawas and Gandhar currently buy imported-LNG at about 50 per cent more price then the delivered cost of RIL gas.

The Petroleum Ministry, they said, a few days back convened a meeting to convey to GAIL in no uncertain terms that the EGoM decision has to be implemented at all cost.

It was decided that 1.5 mmscmd of PMT gas that is currently being supplied to NTPC's northern power plants would be diverted to Kawas and Gandhar. The northern plants will then be supplied KG-D6 gas.

GAIL markets gas from PMT fields which is priced at $5.65-5.73 per million British thermal unit.

Sources said the scheme would be implemented in couple of weeks. NTPC has contracted 0.79 mmscmd of KG-D6 gas for its Anta plant in Rajasthan, 0.54 mmscmd for Dadri unit in Uttar Pradesh, 0.26 mmscmd for its Auriya plant in Rajasthan and 0.22 mmscmd at its Faridabad unit in Haryana.

With the swap, supplies would go up to 3.31 mmscmd. This would still leave 1.15 mmscmd of allocated quantities to be supplied.

RIL currently produces about 63-64 mmscmd of gas as against a potential of 80 mmscmd as government nominated customers like NTPC are yet to offtake their full allocated quantity.

KG-D6 gas has replaced costly imported LNG at Anta plant to save Rs 150 crore in power generation cost annually.

Source:http://economictimes.indiatimes.com/news/news-by-industry/energy/oil--gas/NTPC-to-buy-15-mmscmd-more-gas-from-RIL/articleshow/5784912.cms

RIL Jamnagar Refinery Highest Exporter

2010-04-13T07:34:00.000-07:00

After hitting the slowdown bump when it commissioned its second refinery in December 2008, Reliance Industries Limited (RIL)’s special economic zone (SEZ) in Jamnagar has finished its first full operational year in March 2010 with a quantum leap forward.

Emerging as the single largest export zone in the country, the Jamnagar SEZ has seen its export nearly touch Rs 80,000 crore till March 2010.

“The physical exports from RIL’s Jamnagar SEZ stood at Rs 71,000 crore while Rs 8,000 crore has come from deemed exports. It is the largest SEZ in the country in terms of exports,” said Upendra Vasishth, Development Commissioner (Jamnagar SEZ).

With a capacity of 29 million tonne per annum, the Jamnagar Export Refinery Project (JERP), located in an SEZ, added nearly 20 per cent to the country’s refinery capacity.

Exports from the SEZ were primarily aimed at US and European markets, besides several other locations, including Asia and Africa.

In 2008-09, exports from all SEZs in India were at a modest Rs 99,689 crore. This year the country’s SEZ exports are expected to cross Rs 2 lakh crore, according to Central government sources. The overall figures are still being finalised, the official said.

Gujarat based SEZs have meanwhile contributed about 50 per cent of the country’s overall exports, sources said.

The exports from the 10 operational SEZs in the state have clocked Rs 1,12,600 crore, said government sources.

Topping the charts after Reliance, is Surat SEZ or SURSEZ with Rs 24,000 crore worth of exports in 2009-10. Nokia SEZ in Tamil Nadu ranks third with its exports expected to be in the range of Rs 15,000-18,000 crore, said sources privy to the development.

Last year, SURSEZ was the largest exporter in the country followed by Nokia SEZ.

Exports from Kandla Port Trust’s SEZ and Adani’s Mundra SEZ have been Rs 2200 crore and Rs 1300 crore respectively in the last fiscal.

According to ministry of commerce and industry's official site, Andhra Pradesh leads with 72 notified SEZs, followed by Maharashtra which has 57 SEZs. Tamil Nadu has 55 SEZs and Haryana has 32 notified SEZs.

Andhra Pradesh leads with 21 operational SEZs against Tamil Nadu’s 19. Maharashtra and Karnataka rank third, with 15 SEZs operational SEZs each.

In all, there are 105 operational SEZs in the country with an overall export of Rs 1.5 lakh crore till December 31, 2009, according to official figures by the Ministry of Commerce and Industry.

Formal approvals have been accorded to 571 proposals, of which 348 SEZs have been notified. In Gujarat, so far 48 SEZs have formally been approved out of which 30 have been notified. Maharashtra has been approved 109 SEZs — the highest in the country — of which 57 have been notified.

Source:http://www.business-standard.com/india/news/ril-jamnagar-unit-sez-zlesrs-79k-cr-exports/391642/

Reliance’s KG Gas provides relief to power and fertilizer firms

2010-04-05T07:12:00.000-07:00

Natural gas from Reliance Industries’ prolific D6 field has generated savings worth thousands of crores of rupees for power and fertiliser companies, the main users of the gas.

Commercial production from the field in the Krishna Godavari (K-G) basin started on April 2 last year.

The gas-based power industry is estimated to have saved Rs 6,000 crore over the last year, while the government’s fertiliser subsidy bill is estimated to be lower by Rs 3,100 crore.

Users within the country could get gas from the D6 field, located off the Andhra cost, at a landed cost of $ 4.2 per million British thermal units (mBtu). This price was much lower than alternates like imported liquefied natural gas (LNG), the price of which touched over $20 per mbtu. It was, however, higher than the subsidised price at which the government sold gas to select customers.

NTPC, the country's largest power producer, could reduce its pricey LNG imports as domestic gas became available. The power sector, the biggest consumer of K-G gas, was sold about 18 mscmd of gas, used across 4,745 Mw of power capacity.

According to industry experts, the cost of generating power from naphtha, assuming a naphtha price of $10 per mBtu, would be Rs 3.97 per unit, while the cost of generation from KG-D6 gas assuming a delivered price of $6 per mBtu would be Rs 2.50 a unit. “Depending on the current price of naptha (which is an alternative feedstock), the power sector is estimated to have saved about Rs 6,000 crore while using gas as feedstock,” said Rakesh Jain general manager (energy division) at Feedback Ventures.

These savings have gone to the pocket of the consumer, according to Jain, since most producers have agreements with the state power utilities to simply pass on the cost of fuel to the consumers.

The average saving to a household in Andhra Pradesh, a state which houses some of the plants to which the D6 gas has been allocated, would be as much as Rs 300 per month, according to industry experts.

This is assuming an annual power consumption of 2,448 kilowatt hour.

The fertiliser sector also benefitted, as it switched to gas.

“It has been a very good experience. The supplies have been stable, leading to smooth operations, and we did not use any naphtha (as fuel) in the past one year. The subsidy saving to government from our plant alone is around Rs 100 crore,” said Kapil Mehan, executive director, Tata Chemicals.

The company is using 0.88 million standard cubic metres a day (mscmd) of K-G gas at its fertiliser plant in Babrala (Uttar Pradesh). The total gas supply to fertiliser sector during 2009-10 was 12.24 mscmd, which translated to a production of 6.10 million tonne of urea.

The D6 field is currently producing 60 mscmd of gas.

The government, through its gas utilisation policy, has made allocations to various priority sectors like power, fertiliser, steel, city gas, refineries, petrochemicals, LPG and captive power.

The power sector has been allocated 31.165 mscmd of gas on a firm basis and another 12 mscmd of gas on fallback basis. The fertiliser sector has been given firm allocation of 15.508 mscmd, refineries have been given 5 mscmd of firm allocation and 6 mscmd of fallback allocation and the steel sector has been given 4.19 mscmd firm allocations.

A fallback allocation implies that the sector will get gas if the firm allocation of other sectors is not fully consumed due to some reason.

Source:http://www.business-standard.com/india/news/power-fertiliser-firms-reap-gains/390496/

OilMin wants RIL to join hands with ONGC for Venezuela project

2010-04-01T05:22:00.000-07:00

State-owned Oil and Natural Gas Corp (ONGC) may have won a large oil block in Venezuela but the Petroleum Ministry wants Reliance Industries to join the project to give stability to the venture.
ONGC Videsh Ltd, the overseas investment arm of the state-run explorer, and Reliance had in 2008 teamed up to bid for the Venezuela's Carabobo field auction but last year the Mukesh Ambani-run firm walked out sighting delays in the bid round. OVL subsequently roped in Spain's Repsol YPF and Malaysian state Petronas to win Carabobo-1 heavy oilfield.

But since the project involves investments that may over the life of the project run into USD 40 billion, the Oil Ministry wants Reliance back into the project, sources in know of the development said.

Sources said fillers at very high level were sent to Reliance but it has so far remained non-committal on taking the state.

Reliance has, however, agreed to bail the state-run firms out agreeing to buy over one-fifth of the 400,000-480,000 barrels per day of oil production envisaged from the project.

OVL, Repsol and Petronas all have an 11 per cent stake each in the project, while Indian Oil Corp (IOC) and Oil India Ltd (OIL) have 3.5 per cent each. The remaining 60 per cent is held by Venezuela's state Petroleos de Venezuela (PdV).

As per the bid conditions, the foreign firms, who were offered a maximum of 40 per cent stake in the project, had to commit to offtake the entire production.

Sources said of the planned output, Repsol had indicated it can take 165,000 barrels per day while Petronas said it could take 100,000 bpd. The remaining 220,000 bpd was split equally between OVL and OIL.

OVL's share of 110,000 bpd would go to ONGC's subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL), while Reliance agreed to take OIL's share for at least 10 years from the start-up in 2016-17.

Source:http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/OilMin-wants-RIL-to-join-hands-with-ONGC-for-Venezuela-project/articleshow/5749798.cms

Cairn raises Rajastan field estimates

2010-03-29T05:59:00.000-07:00

The India unit of UK-based Cairn Energy Plc raised estimates of in-place reserves at its Rajasthan field, the country’s largest onshore petroleum deposit, to four billion barrels of oil equivalent from 3.7 billion.

Cairn India Ltd also lifted its estimates on potential reserves to 6.5 billion barrels of oil equivalent from four billion on Tuesday.

As a result, “the recovery potential has doubled from 700 million barrels to 1,400 million barrels, with the plateau production increasing from 240,000 bpd (barrels per day) from the earlier approved plateau production of 175,000 bpd,” said Rahul Dhir, chief executive of Cairn India.

However, the directorate general of hydrocarbons, the regulator, said it doesn’t endorse such numbers. “We have received a copy of the report as prepared by the independent agency,” said director general of hydrocarbons S.K. Srivastava. “The DGH does not certify contingent resources. Contingent and prospective resources are futuristic resources.”

An official of state-run Oil and Natural Gas Corp. Ltd, which has a 30% stake in the Rajasthan field that’s operated by Cairn India, said the DGH hadn’t ratified the new numbers, on condition of anonymity. Cairn India said it had informed the regulator of the revised estimates.

“There has been a significant increase in the prospective resource base. All stakeholders including DGH were informed regarding the revised estimates,” Cairn India spokesperson Manu Kapoor said by email. “In addition to a comprehensive internal review, (consultants) DeGolyer and MacNaughton have conducted an independent assessment of the majority of the leads and prospects in the prospective resources.”

Shares of Cairn India rose 3.76% on the Bombay Stock Exchange to close at Rs292.80 on Tuesday. The benchmark Sensex index rose 0.23% to 17,451.02 points.

Cairn Energy jumped to a record in London trading after announcing the start of oil drilling in Greenland and forecasting higher output at its Rajasthan field. It climbed as much as 12% to 425.1 pence, the highest price since the stock began trading in 1989. The shares were at 418.5 pence as of 11:28am local time, valuing the Edinburgh-based company at £5.84 billion (8.75 billion).

Production of the waxy crude oil from the Rajasthan field is around 25,000 bpd, which the company expects to ramp up to 125,000 bpd by the second half of this year.

Cairn India has sales arrangements to supply 1,43,000 bpd to refiners such as Hindustan Petroleum Corp. Ltd, Mangalore Refinery and Petrochemicals Ltd, Indian Oil Corp. Ltd, Reliance Industries Ltd and Essar Oil Ltd. Cairn has already made an investment of $4 billion in the Rajasthan field with an additional $2 billion to be invested over the next two years. “We are fully funded for the next phase,” Dhir said.

Source:http://www.livemint.com/2010/03/23214424/Cairn-raises-Rajasthan-field-e.html

Shutdowns clip India's Feb refinery output growth

2010-03-25T06:24:00.000-07:00

India's refinery output inched up an annual 0.8 percent in February, the slowest pace since July, as maintenance shutdown of some state-run units offset higher crude processing by private companies, government data showed on Thursday.

Indian refiners processed 3.39 million barrels per day (bpd) of crude oil in February, when refining margins for simple Asian refiners rose to $1.84 from $1.78.

State-run refiners processed 2.5 percent less crude oil in February compared with a year ago, while Reliance Industries Ltd (RELI.BO: Quote, Profile, Research) increased output by 9 percent and Essar Oil processed 9.8 percent more crude oil than in February last year.

For a table of February refinery output, see [ID:SGE62O0CG]

State-run Mangalore Refinery and Petrochemicals Ltd (MRPL.BO: Quote, Profile, Research) shut a diesel unit towards end-February.

A third of the 190,000 bpd Manali refinery of Chennai Petroleum Crop was shutdown in February to raise its capacity by 20,000 bpd and revamp some units to produce cleaner fuel. [ID:nSGE62F08T]

State-run refineries operated at 112 percent of their declared capacity in February, down from about 115 percent a year ago, while private refiners increased capacity utilisation to 117 percent from 107 percent.

India's refinery output has grown year-on-year every month since last August, after recording monthly annual declines since November 2008.

India's natural gas output rose 72.6 percent to 4.22 billion cubic metres, helped by Reliance Industries's production from its deep-sea field, which started pumping gas last year.

Source:http://in.reuters.com/article/domesticNews/idINSGE62O09220100325

South India to receive Reliance’s KG gas by 2012: Petroleum secy

2010-03-22T07:17:00.001-07:00

Union Petroleum Secretary S Sundareshan on Saturday said that south India will start getting natural gas from the Krishna-Godavari basin from 2012.

The Ministry of Petroleum and Natural Gas had called for a meeting of Reliance Industries Ltd (which owns the gas fields) and Gas Authority of India Ltd (which lays pipelines) about ten days ago and told them to implement the project in a “strict timeframe”.

Mukesh Ambani's Reliance has been authorised by the government to lay a pipeline from Kakinada to Chennai and this pipeline would further extend to Tuticorin. Reliance would also lay a pipeline between Chennai and Bangalore, he told a press conference here.

The gas would start flowing to Tamil Nadu anytime between March 2012 and the end of that year, he said. There would be connectivity to Madras Fertilisers Ltd and SPIC, he said, referring to the two fertiliser companies, whose operations are suffering for want of natural gas.

On the issue of pricing of petroleum products, he said, “It is not possible to insulate consumers continuously from the volatile international crude price and the government has to take a hard decision in the future.”

At present, subsidy component for petrol is Rs.5 per litre, for diesel Rs. 3, for kerosene Rs. 16 and for LPG Rs. 260 a cylinder. Due to under-pricing the government had incurred an expenditure of Rs.45,000 crore in the current financial year.

Poor people were forced to pay for supplying subsidised petrol and petroleum products to those who were affluent.

The Secretary said oil marketing companies were fully geared to meet the increasing demand for petroleum products, which had been going up at 15 per cent per annum for petrol, 8 to 9 per cent for diesel, and 10 per cent for LPG. In Tamil Nadu, there had been a 10 per cent increase of LPG consumers every year. The State had achieved a coverage of 75 per cent in respect of LPG supply, which might increase to 83 per cent in the next four or five years.

There was no shortage of LPG in the State and new connections were being released to prospective consumers without any waiting list and efforts were being made to supply refills expeditiously.

Source:http://www.hindu.com/2010/03/21/stories/2010032159130100.htm

Reliance Industries to supply 3 times more natural gas to NTPC

2010-03-12T05:56:00.000-08:00

State-owned power utility NTPC Ltd has tripled the volume of natural gas it buys from Reliance Industries controlled by CMD Shri.Mukesh Ambani at the government-approved price of USD 4.2 per mmBtu, to 1.81 million standard cubic meters a day.

NTPC, which till last month was taking 0.61 mmscmd from RIL's eastern offshore KG-D6 field, has begun drawing an additional 1.2 mmscmd of gas to boost power generation, sources in know said.

In October, the government had allocated an additional 3.85 mmscmd gas to NTPC. Since NTPC did not want to use the KG-D6 gas at its Kawas and Gandhar power plants in Gujarat that are connected with pipelines ferrying KG-D6 gas from the Andhra coast, a complex swap arrangement was worked out with state-owned gas utility GAIL India.

Under this arrangement, GAIL diverted gas from other sources to NTPC plants and supplied RIL gas to its existing customers.

Source:http://reliance-news.blogspot.com/2010/03/ntpc-trebles-natural-gas-procurement.html

Reliance Industries ties up with Transocean Ltd under a five year drilling contract

2010-03-09T06:10:00.000-08:00

Transocean Ltd’s new ultra deepwater drillship Dhirubhai Deepwater KG2 is at work offshore India for Reliance Industries under a five-year contract. The vessel is a joint venture between Transocean and Pacific Drilling Ltd.

The dynamically positioned vessel has National Oilwell Varco drilling packages, off-line tubular-handling and stand-building capacity, advanced mud systems, and can build, store and run several subsea trees, says Transocean. In addition, the vessel has a variable deckload of 20,000 metric tons (22,046 tons), can work in waters to 12,000 ft (3,658 m) of depth and drill to 35,000 ft (10,668 m).

Source:http://www.businessweek.com/ap/financialnews/D9EAM6401.htm

Mukesh Ambani’s RIL close to striking hydrocarbon at Cauvery

2010-03-08T04:17:00.000-08:00

The company has temporarily shifted focus to Cauvery-Palar offshore from the Krishna-Godavari Basin where it had a huge success.

In the Palar block, Mukesh Ambani'sRIL is understood to be testing a well. The hydrocarbon success would be known only after testing is completed, industry sources said.

After successful completion of its drilling activity in the Palar block, the company has now moved to CY-D5 and is drilling an appraisal well. Sources told Business Line that RIL started drilling the appraisal well a few days ago.

CY-D5 is where RIL had run out of luck after striking oil and gas in only one out of the five wells drilled.

On why the company returned to CY-D5, a source said: “Though the company ran out of luck in the subsequent wells drilled, the first discovery was significant. An appraisal well is drilled to quantify the find.”

The find in the first well showed two hydrocarbon bearing zones.

The first zone had 550 barrels a day of oil and one million cubic feet a day of gas, while in the second zone the company found 31 million cubic feet a day of gas and 1,200 barrels a day of condensate.
According to the initial appraisal programme for CY-D5 as submitted to the management committee of the block, RIL was estimated to invest about $22.75 million for undertaking additional work. “This number, however, is expected to go up now,” a source said while not indicating the definite figures.

These two blocks were awarded to RIL in NELP III. As on date, RIL has 29 oil and gas blocks, and has made 44 discoveries (both commercial and non-commercial) including overseas properties.
Blocks such as CY-D5 are called wild cat blocks, and the success ratio is one in 10 globally in such blocks. Wild cat blocks are new frontier areas.

Source:http://www.thehindubusinessline.com/2010/03/08/stories/2010030851470100.htm

Marketing Margin is Reliance’s right: Deora

2010-02-23T06:06:00.000-08:00

Oil Minister Murli Deora today said Reliance Industries need not club marketing margin with the gas sale price for purpose of calculating royalty -- a statement that overturns a suggestion by oil regulator DGH.

DGH had wanted the $0.135 per million British thermal unit margin, which RIL charges towards marketing cost and risks, to be added to the sale price of $4.20 per mmBtu for calculating royalty and profit share to the government.

"The Production Sharing Contract (under which firms like RIL produces oil and gas from areas given by the Government) does not envisage sharing of revenue earned by the contractor (RIL) on the marketing margin between the government and the Contractor," Deora told Rajya Sabha.

"The marketing margin is beyond the delivery point and arises as a result of Gas Sale and Purchase Agreement signed between the seller and the buyer," Deora said in a written reply to a question by member Amar Singh.

"The PSC provides for sharing of revenue between the government and the contractor (RIL) of the sale of gas at the said price at the delivery point," he said, adding that marketing margin was settled between buyer and seller and Government has neither decided nor approved the same.

Deora said marketing margin arises as a result of Gas Sale and Purchase Agreement (GSPA) signed between the seller and the buyer and was mutually settled between them.

"The rate of marketing margin neither in the case of KG D6 gas nor in any other case has been decided or approved by the government," he said.

RIL charges marketing margin costs, incurred in customer identification, execution and sales of a Gas Sales Agreement, customer registration and activation, gas sales planning, daily gas sales operations, gas accounting, invoicing and collection and establishment of regional offices, and risks like penalties and liquidated damages, volume risks, credit risks and claims and settlement of disputes.

Source:http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/RIL-need-not-pay-royalty-on-marketing-margin-Deora/articleshow/5607383.cms

NTPC buys more gas from RIL

2010-02-22T20:55:00.000-08:00

State-owned power utility NTPC has signed agreement to buy 1.2 million metric standard cubic meter a day (mmscmd) of more gas from Reliance Industries' (RIL) eastern offshore KG-D6 fields at the government-approved price of $4.2 per million British thermal unit (mBtu).

NTPC signed Gas Sale and Purchase Agreement (GSPA) to buy more gas on February 16, taking its total supplies from KG-D6 to 1.81 mmscmd, sources in the know said.

The government had in October 2009 allocated NTPC 3.85 mmscmd, beyond the 0.61 mmscmd it had earlier signed for.

But NTPC did not want to use the KG-D6 gas at its Kawas and Gandhar power plants in Gujarat, which are connected with pipelines ferrying KG-D6 gas from the Andhra coast. So, a swap arrangement was worked out wherein state-owned gas utility GAIL India was to divert gas from other sources to NTPC and supply Reliance gas to its existing customers.

However, limitations in GAIL's pipeline capacity restricted the swap to just 1.2 mmscmd, sources said, adding that additional gas supplies to NTPC would begin by next week.

NTPC's Anta plant in the national capital region currently gets 0.61 mmscmd of KG-D6 gas.

Source:http://www.business-standard.com/india/news/ntpc-triples-kg-d6-gas-offtakeril/86281/on

RIL fulfilling Lanka IOC’s oil demand

2010-02-22T06:45:00.000-08:00

Almost 75 per cent of Lanka IOC Plc's petrol and diesel demand for the first six months of the current fiscal has been met by Reliance Industries Ltd (RIL) led by Mukesh Ambani.
“For the first six months, of the 300,000 tonnes of products imported almost 225,000 tonnes have come from RIL,” Mr K.R. Suresh Kumar, Managing Director, Lanka IOC, told Business Line.
“In 2008-09 we had imported 550,000 tonnes of products of which 30-40 per cent came from RIL. Sri Lanka has just one refinery (owned by Ceylon Petroleum) with a capacity of 2 million tonnes, and the demand is close to 4 million tonnes for all petroleum products. Thus, to meet the balance demand we had to import.”

Reliance operates two refineries in Jamnagar -- one with capacity of 33 million tonnes and the other of 27 million tonnes.
Declining to share the numbers at which Lanka IOC sources these products from RIL, he said, “Lanka IOC procures through a tendering process and RIL has bagged orders against tenders. It is at a very competitive price.”

Lanka IOC sells auto fuels through its 151 retail outlets with plans to add 20 during the current calendar year. On how much is the company's performance impacted by the volatility in international crude prices, he said, “The performance is affected. As there is not much of storage capacity in the country, we have to import more frequently resulting in high costs.”
Besides, the company also incurs revenue loss on sale of petrol and diesel as the price is fixed by the Sri Lankan Government. “Though there is constant interaction between the Government and the companies the prices are not completely in sync with international prices,” he said.

Currently, petrol is sold at Sri Lankan Rs 115 a litre (Indian Rs 50 a litre) and diesel is sold for Sri Lankan Rs 73 a litre (Rs 30 a litre). The revenue loss on petrol is Sri Lankan Rs 8 a litre and on diesel is Sri Lankan Re 1 a litre.
The company has no plans to enter the cooking fuel (domestic LPG) retailing business, he said. “For Lanka IOC the main revenue generator has been the retailing business. But now there is a conscious effort to change it by diversifying into bunker fuels and bitumen.”
On if the company has any plans to set up a refinery in Sri Lanka, he said, “It will not be economically viable.”

The company recently got Govt concessions for exports and is looking at exporting lubes to West Asia, Singapore, and Maldives.

Source:http://www.thehindubusinessline.com/2010/02/22/stories/2010022250900200.htm

Reliance’s KG D6 gas worth $1.5 bn: Oil Ministry

2010-02-22T06:36:00.000-08:00

Reliance Industries-operated D6 gas field in the Krishna-Godavari (KG) basin has produced more than 10 bn cubic meters of natural gas worth over $1.5 bn in the first 10 months, a senior official in the oil ministry said. RIL commenced gas production from its KG-D6 on April 2, 2009.

Oil minister Murli Deora confirmed that the ministry has reviewed gas production from KG-D6. “It is a major achievement in country’s energy security. The (gas) production has helped industries particularly power and fertiliser sectors,” he told ET.

As per an oil ministry’s note, about 22 million standard cubic meter per day (MMSCMD) gas from KG-D6 is supplied to power units. “This has helped in generating an additional 5,000 MW power. It not only reduced the cost of producing power but also revived four stranded power plants in Andhra Pradesh,” the official said requesting anonymity.

“Now most of these power plants (getting KG-D6 gas) are running on a 90% plant load factor (PLF),” he added. PLF is measurement of average capacity utilisation of a power plant. Earlier, PLF of these power units was around 60%.

Due to the KG-D6 gas, government has been able to save subsidies on urea production to the tune of about Rs 4,000 crore, he said.

RIL is currently producing about 60 MMSCMD gas from KG-D6. “It is an achievement that the company has ramped up gas production in such a short time. It is only 20 MMSCMD less than achieving peak production level of 80 MMSCMS,” he said. At present production is taking place in 16 wells. But all 18 wells of KG-D6 are ready to commence production.

Reliance has already signed gas sale purchase agreements (GSPAs) with 48 customers for supplying over 61 MMSCMD. Consumers are specified by an empowered group of ministers (EGoM), and they are from fertilisers, power, city gas distribution, steel, LPG, refinery and petrochemical sectors.

In December 2009, RIL successfully tested the design capacity of its KG-D6 deepwater gas production facilities which gave a flow rate of 80 MMSCMD. RIL has been able to produce first gas from its KG-D6 block in a record time of six and a half year. Normally, deepwater production of such scale takes 9–10 years time. The KG-D6 gas field is one of the top five largest deepwater gas projects globally.

Source:http://economictimes.indiatimes.com/articleshow/5601365.cms

Parikh charges up private oil retailers including Reliance and Shell

2010-02-08T06:40:00.000-08:00

Private refiners Reliance, Essar and Shell plan to re-enter the petrol pump business in a big way if the government goes ahead with the Kirit Parikh panel’s recommendation to have free market pricing in petrol and diesel.

The private refiners had shut their pumps down when crude oil jumped to $147 a barrel and the state-owned refiners compensated for selling fuel below costs by the government.

“Private refiners are closely watching the government move. Free market pricing of petrol and diesel now is the most appropriate as it is around $70 to $80 a barrel,” industry sources said.

The first indication of their aggressive intent came from Essar group chairman Shashi Ruia who said Essar Oil planned to increase its petrol pumps to 2,000 in the next few months from 1,450.

Sources in Reliance Industries said they would re-enter the business if the government provided a level-playing field to the private players.

Terming it a landmark, Credit Analysis and Research (CARE) Limited has called for the immediate implementation of the Kirit Parikh Committee report that has recommended freeing of petrol and diesel prices and a steep hike in LPG and kerosene rates. This was the key to cutting subsidies, it said.

“The government needs to strike a balance between reducing the subsidy burden on the public sector companies, reducing the fiscal deficit and managing the current inflationary scenario, given that the economy is in the process of revival and is attempting to restore its buoyancy,” CARE said in a statement here.

“In the past, the entry of private players in the retail fuel market had resulted in an erosion of about 10 per cent in the market share of the public sector companies.”

Sources in the state-owned refiners said they would suffer immensely if the government just freed petrol and diesel prices, while leaving kerosene and LPG untouched.

“Private sector players would then have a field day because they can sell petrol and diesel at market-determined prices. Two-thirds of our losses are from cooking gas and kerosene,” the sources said.

The private firms had a market share of 14 per cent in 2006, but it had gradually reduced to a negligible sum following the spike in crude prices and absence of a compensating mechanism.

Reliance had to shut its retail operations down after global crude oil prices peaked. Essar and Shell India also closed some of their pumps, but when crude prices softened, they restarted some operations.

Arguing for free market pricing in its report, the Parikh committee said “a market-determined pricing system for petrol and diesel can be sustained in the long run by providing level playing field and promoting competition among all players, public and private, in the oil and gas sector.”

The report said a spike in crude price from $70 a barrel to $120 a barrel would result in an increase of around Rs 160 per month for two wheeler users and less than Rs 1,000 per month for car owners.

Source:http://www.telegraphindia.com/1100208/jsp/business/story_12079730.jsp

Reliance’s KG D-6 gas: Fast replacing the spot LNG demand in the country

2010-02-03T03:43:00.000-08:00

KG D-6’s gas has affected the LNG’s spot market. Power and Fertilizer companies have diverted their attention towards KG D-6 for the gas supply. In last one month, in Hazira and Dahej terminals, not even a single cargo of LNG spot cargo has been arrived.

The spot market of Liquid Natural Gas (LNG) is shrinking. This could well be estimated from the fact that the business has faced beating in last one month at the Hazira LNG terminal of Shell and Dahej terminal of Petronet LNG. KG D-6’s gas has affected the LNG’s spot market to a great extent during the recent times. Reliance Industries’ (RIL) prolific KG D-6 is now producing 60 million standard cubic metre of natural gas every day (mmscmd) and has almost replaced the spot LNG demand in the country.

Most of the power and fertilizer companies have diverted their attention from the spot market of LNG to KG D-6. Supply of KG D-6 gas has largely replaced the demand of spot LNG. This is evident from the fact that before the allocation of KG D-6 gas, RIL itself was consuming almost 4 cargoes of LNG every month. According to the government sources, in last one month, in Hazira and Dahej terminals, not even a single cargo of LNG spot cargo has come.

Chief Executive Officer and Managing Director of Petronet Mr P Dasgupta said, “Today no one is making any LNG’s spot deal, the last LNG spot cargo was arrived in November 2009. The demand can only be there with advent of new energy and fertlizer companies. The present demand for the gas is being met by KG D-6 gas and the long term gas demand is being met by import of LNG by Petronet.”

According to the sources the future price of LNG is close to $8.2 per mmbtu, while KG D-6 gas is available at $4.20 per mmbtu. Till December last year even RIL was buying spot LNG from Hazira, every month for its Jamnagar Refinery. After it was allotted KG D-6 gas, no one is buying at spot LNG from Hazira. One of the officers of Shell India, also confirmed low spot LNG business, however, he refused to shares the figures.

Prior to KG D-6 gas supply, total gas supply in the country was staggering at around 110 mmscmd, including the long-term LNG sourced by PLL and Shell, as against the demand of about 175 mmscmd. Remaining gas demand was met through spot LNG. With the production of 60 mmscmd gas from KG D-6 field, the present demand of gas in the country is satisfied. However, the gas demand in the future is likely to rise again in the coming years as the domestic supply is unexpected to match the pace of growing energy demand of the nation.

Source:http://oilandgasindia.blogspot.com/2010/02/kg-d-6-gas-fast-replacing-spot-lng.html

Mukesh Ambani led RIL’s LyondellBasell bid gets support from Dutch Govt.

2010-02-03T01:52:00.001-08:00

The Dutch Government's Nodal Investment Agency says that they will support RIL’s for LyondellBasell if the deal goes through. The Netherlands, which is supporting Mukesh Ambani’s $12 billion plus bid for the Rotterdam based pet-chem giant, is the parent country of LyondellBasell.

Bass Pulles, Commissioner of the Dutch Foreign Investment Agency, which facilitates investments in an exclusive interview with ET Now’s Sumit Chaturvedi, in Hague, Netherlands said the government will support RIL's bid for LyondellBasell. “Since RIL is a foreign company, and so is LyondellBasell, we do offer assistance in the process which surrounds the take over, for instance speeding up immigration procedures or giving a warm shoulder from the ministry”, he said.

Reliance Industries Limited submitted an all-cash non-binding bid to buy a controlling stake in LyondellBasell in 21st of November, 2009. The bid came after LyondellBasell, the third largest petrochemical company in the world, filed for bankruptcy in January, 2009. The deal, if consummated, would facilitate growth of Reliance’s core business. As LyondellBasell has large petrochemical capacities coupled with a good tech portfolio as well as joint ventures in the Middle East, it would help Reliance Industries grow and reach the Western markets.

In December, 2009 Reliance Industries stated that it had no intentions of buying any of the debt from LyondellBasell. The month of January, 2010 witnessed Mukesh Ambani-led Reliance Industries stepping up its offer for the acquisition by offering $13.5 billion instead of the earlier $12 billion.

The Netherlands government support comes as a shot in the arm for Mr. Mukesh Ambani as he prepares to bid for the Rotterdam based LyondellBasell. When asked why the vote of confidence, Pulles said, “They might consider to reinvest again, they might send out positive message to other companies back home or they might inform us on any other strategic developments in their industry.”

The Netherlands is home to global brands like Philips, ING Bank and wants to attract more talent and capital from India. They already have big investments from over 120 odd companies in India such as Infosys and TCS. If Mukesh Ambani does tide over the resistance from some lenders of LyondellBasell, he can be rest assured about support from Dutch Authorities.

Mukesh Ambani’s RIL gets supports from Netherlands Govt. on LB bid

2010-02-03T01:52:00.000-08:00

Reliance makes India shine in the export market

2010-01-27T05:39:00.000-08:00

India more than doubled its exports of petroleum products to the U.S. last year after Reliance Industries Ltd. started a refinery for exporting, according to tanker data collected by Clarkson Research Services Ltd.

At least 610,000 metric tons of gasoline (about 5.19 million barrels) was shipped to the U.S. from India, using 10 Aframax tankers, Clarkson data showed. India exported 2 million barrels of fuel to the U.S. in 2008, according to the Department of Energy.

Reliance, India’s biggest non-state company, started an export-oriented 580,000-barrel-a-day refinery in December 2008. It’s next to an older plant that can process 660,000 barrels a day. Together, they make up the largest refining complex in the world, according to Reliance.

“Most of India’s exports are from Reliance, which set up the new export-oriented refinery to get tax breaks from the government,” said Seema Desai, a London-based analyst at Eurasia Group. “The government-owned refineries are for the domestic market.”

India’s state-owned refineries, such as Indian Oil Corp., receive government subsidies to sell gasoline in the domestic market below cost, unlike privately owned refiners.
Reliance Exports
About 57 percent of Reliance’s refined output is for exports, Alok Agarwal, Reliance’s chief financial officer, said in an e-mail.
“The decision on the mix between the two depends on where we get better profits and the capacity of the markets to absorb the output,” Agarwal said. “We are today dealing with all the major oil companies of the world to sell our output in Asia, Europe and the U.S.”
The Baltic Clean Tanker Index rose for a third session today, up 2 points to 900 on the London-based Baltic Exchange. Crude oil for March delivery gained 72 cents, or 1 percent, to settle at $75.26 a barrel on the New York Mercantile Exchange.

As a result of rising exports, Reliance became for the first time in 2009 one of the top 10 charterers of Aframax tankers to ship petroleum products, according to a report released by Poten & Partners, a shipbroker.
Hess Corp., the fifth-largest U.S. oil company, chartered a tanker to transport gasoline for Reliance in June, according to Millennium Chartering Pte., a ship brokerage based in Singapore. Hess hired at least five Aframax tankers last year to ship gasoline to the U.S. from India, the Clarkson data showed. Aframaxes can carry 830,000 barrels.
Reliance Exports Rise

Reliance’s exports of refined products increased to 23.6 million metric tons in the nine months ended December, up from 16.2 million metric tons a year ago, the company said Jan. 22.
Domestic sales also increased, to 20.65 million metric tons from 8.01 million a year earlier, according to Bloomberg calculations based on export figures.

Indian exports rose as U.S. and European refineries process less oil because of lower profit margins. said James Williams, an economist at energy research firm WTRG Economics in Arkansas.
Plants in the U.S. ran at 78.4 percent of capacity in the week ended Jan. 15, the lowest level since September 2008, according to the DOE.

Source:http://www.businessweek.com/news/2010-01-25/india-fuel-exports-to-u-s-doubled-in-2009-clarkson-data-show.html

Reliance Increases Fuel Sales in India to Meet Rising Demand

2010-01-25T06:29:00.000-08:00

Mukesh Ambani led Reliance Industries Ltd., operator of the world’s largest refining complex, increased its share of sales in India to meet growing demand for fuels.

The Mumbai-based energy explorer and refiner sold 20.65 million metric tons of fuels in the South Asian nation in the nine months ended Dec. 31 compared with 8.01 million tons a year earlier, according to Bloomberg calculations based on export figures released by the company today. The numbers were confirmed by a Reliance spokesman, who declined to be identified in line with company policy.

Reliance, which can process 1.24 million barrels of oil a day, increased its share of fuel sales in India as the global recession cut demand for gasoline and diesel in the U.S. and Europe. The company gave up the export-only status of its first refinery in April after completing in December 2008 a 580,000 barrel-a-day refinery that caters to overseas customers.

Domestic sales as a share of output rose to 47 percent in the nine months ended Dec. 31, compared with 33 percent a year earlier, according to data released by the company. Customers include Indian Oil Corp., the largest state-run refiner, which started purchasing diesel and gasoline from Reliance in April.

“Buying fuels from Reliance reduces our costs,” Gyan Chand Daga, marketing director at Indian Oil, said by telephone from Mumbai today. “Demand for fuels is growing and we need to meet that gap.”

India’s oil product sales grew 3.2 percent in November from a year earlier, compared with a 2.7 percent contraction in demand in major industrialized economies, the International Energy Agency said in its latest monthly report.

Retail Outlets

Reliance has reopened more than 600 retail fuel outlets in India, according to today’s statement. The company mothballed its 1,433 gas stations nationwide as crude soared to a record in 2008, unable to compete with state-owned refiners that sold motor fuels below cost.

The revenue loss for state refiners on sales of motor fuels declined after crude fell from a record in July 2008. Indian Oil said in August it lost 2.30 rupees on every liter of diesel sold compared with a shortfall of 13 rupees a liter in September 2008.

The government partly compensates state refiners for selling fuels below cost without extending the benefit to private refiners, including Reliance and Essar Oil Ltd.

Source:http://www.bloomberg.com/apps/news?pid=20601091&sid=auw0zfU5yliU

Reliance becomes first Indian company to produce Euro IV compliant diesel

2010-01-25T06:27:00.000-08:00

Unlike 2005, when the country’s private refiners were late in producing Euro-III compliant fuel, this time the private sector has taken a lead, with Reliance Industries Ltd (RIL) controlled by Shri.Mukesh Ambani becoming the first Indian refinery to produce Euro-IV compliant diesel.

The first cargo of 25,000 tonnes of Euro-IV grade diesel from RIL’s refinery at Jamnagar was shipped by Hindustan Petroleum Corporation Ltd (HPCL) on Friday, said an informed source. This is also the first coastal supply of Euro-IV diesel for the Indian market.

Sources said RIL was also gearing up to produce the higher grade of petrol. With the private refiner now ready to produce the higher grade, it will be easier for oil marketing companies to ensure the availability of Euro-IV diesel at the retail outlets of all 13 major cities of India by April 1, the target date.

An RIL spokesperson confirmed the sale of diesel. He did not give details on total production, citing trade confidentiality reasons.

Indian Oil Corporation, the biggest oil marketer, and Bharat Petroleum Corporation Ltd have recently floated tenders to import 120,000 tonnes and 60,000 tonnes of Euro-IV diesel, respectively.

Government policy calls for petrol and diesel meeting Euro-IV standards are to be supplied in 13 cities, including Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad and Ahmadabad, from April 1. Euro-III grade fuel is to be supplied across the rest of the country from the same day. The former deadline will be met. Sales of Euro-III will begin in a phased manner between April 1 and October 1.

Source:http://www.business-standard.com/india/news/ril-refinery-first-to-produce-euro-iv-auto-fuel/383580/

PTL Solar launches Dubai Reliance Solar dealership

2010-01-25T06:25:00.000-08:00

Dr. Farooq Abdullah, Minister for New and Renewable Energy, Government of India, inaugurated the first exclusive international Reliance Showroom at the Dubai Creek Towers in Deira. Rabindra Satpathy, President of Reliance Solar Group was also at inauguration ceremony and informed that PTL solar is appointed as exclusive distributors for the Middle East and Africa region for Reliance Solar Group which is a part of Reliance Industries Ltd.

PTL Solar, experts in solar street lighting solutions and part of Green Energy, has become the exclusive distributor in the Middle East and Africa for Reliance Solar Group, part of Reliance Industries, one of India’s largest private sector enterprises. PTL Solar is highly commended and appreciated at the Power Generation and Water Solutions Middle East Awards 2009 for ”ENERGY EFFICIENCY” AND “POWER GENERATION AND WATER SOLUTIONS INNOVATION OF THE YEAR AWARD 2009“:. The company is also expert in solar street lighting solutions and part of Green Energy LLC.

Business partners, suppliers, and customers of PTL Solar, as well as a few members of a delegation from the Confederation of Indian Industry (CII) also attended the event. Prabissh Thomas, Managing Director of PTL Solar, briefed guests about the offerings of the showroom and the details of the distributorship agreement with Reliance Solar Group.

Reliance Solar Group specialises in solutions ranging from solar lanterns, home lighting and street lighting to water purification, refrigeration and solar air conditioners — all based on solar energy.

As part of its campaign to transform the existing lighting system into solar-based applications, PTL Solar has supplied its solar energy outdoor lighting units GRENlite to Dubai Electricity and Water Authority (DEWA) as well as Tecom Investments’ Dubai Outsource Zone and Dubai Internet City.

In addition, the company has installed solar car park lights for Nakheel in the Waterfront project, as well as illuminated the first automotive factory in the UAE for heavy vehicles assembled by Scania.

Celebrate this Republic day with Reliance Retail - Bachat Badi Faayda Bada

2010-01-21T06:51:00.000-08:00

As part of the Republic Day Celebrations, all stores in the Reliance Value Format comprising, Reliance Fresh Reliance Super, Reliance Supervalue & Reliance Mart will be hosting a Mega Campaign dubbed as Bachat Badi Faayda Bada, to reach out to our consumers who shop in our stores.

The Mega Consumer Promotion begins on 20th January and ends on 31st. January 2010.

All Categories will be participating in this Mega Promotion with the exceptions of MFT, Fine Jewellery, Tobacco and BWS.

Consumer Promotion Mechanics: Any customer shopping for Rs.100 at any store of Reliance Fresh, Reliance Super, Reliance Mart or Reliance Super Value will get a chance to participate in the contest and she will have an opportunity to win the Mega prize worth Rs 1 Lac each zone [x 6 zones pan India].

Prize:

- Samsung LCD 40BS30

- Onkyo Home Theatre System

All the Customer need to do is spend Rs 100 and answer a simple question - Reliance is the PERFECT INDIAN store because....

The Consumer will complete the statement and fill in details viz. Name, Mobile no. and email address. He/ she then will have to fold the Tag once and drop it into the special drop box in our stores.

Reliance Digital is running the "Rs. 26 Buy-a-dream Offer" from January 23rd - January 31st 2010 at all its stores across India.

About Reliance Digital's "Rs. 26 Buy-a-dream Offer":

Reliance Digital in its endeavour to bring the best products to its customers, this republic day offers a unique opportunity to each and every customer to buy their dreams. Reliance Digital invites customers to visit any of its stores in India with just Rs. 26/- and take home LCDs, Mobile Phones, Consumer Durables and a host of Home Appliances from a range of brands. The customer for his favourite dream buy has to just pay a downpayment of Rs. 26/- and avail extremely attractive EMI offers from Reliance Digital to take their dream purchases home

Reliance Trends, the Apparel and Accessories specialty store from Reliance Retail celebrates Republic Day at its outlets across the country with a special Republic Day offer. This offer is valid between Jan 22nd to 26th at all Trends stores across India. On purchase bill of Rs. 1950/, customers get clothes worth Rs. 1950/ FREE!

Notes to Editor

About Reliance Retail Limited

Reliance Retail Limited (RRL), a subsidiary of Reliance Industries Limited opened its first retail store in November 2006 and today operates more than 1,000 stores in over 86 cities, spanning 14 states with over 4.2 million sq ft of trading space. RRL is a multi-format retailer that operates Reliance Fresh - a neighborhood store concept, Reliance Digital - a consumer durables and information technology concept, Reliance Mart - a hyper market concept, Reliance Trends - an apparel specialty concept, Reliance Wellness - a health, wellness & beauty concept , iStore by Reliance Digital- an Apple specialty store concept, Reliance Footprint -a footwear concept, Reliance Jewels - a jewellery concept, Reliance Time-Out- a books, music & entertainment concept, Reliance Super- a Minimart concept, Reliance Living Homeware - a household utilities specialty store concept, Reliance Living Furnishings-a specialty store concept for home furnishings, Reliance Living Furniture-a home office furniture specialty concept, Reliance Home Kitchen- a kitchen's solution specialty store concept, Reliance AutoZone - an automotive specialty concept and Vision Express-an optical specialty store concept.

Reliance Industries Limited

Reliance Industries Limited (RIL) is India's largest private sector company on all major financial parameters with a turnover of Rs. 1, 46,328 crore (US$ 28.85 billion), cash profit of Rs 22,365 crore (US$ 4.41 billion), net profit (excluding exceptional income) of Rs. 15,637 crore (US$ 3.02 billion) and net worth of Rs 126,373 crore (US$ 24.92 billion) as of March 31, 2009.

RIL is the first private sector company from India to feature in the Fortune Global 500 list of 'World's Largest Corporations' and ranks 117th amongst the world's Top 200 companies in terms of profits. RIL ranks 75th in the Financial Times FT Global 500 list of the world's largest companies. RIL is rated as the 15th 'Most Innovative Company' in the World in a survey conducted by the US financial publication-Business Week in collaboration with the Boston Consulting Group.

Source:http://reliance-news.blogspot.com/2010/01/reliance-retail-celebrates-republic-day.html

Reliance gas helps save Rs 4760 cr in fertilizer subsidy

2010-01-15T04:37:00.000-08:00

Reliance Industries' eastern offshore KG-D6 gas has helped fertilizer companies under the guidance of Shri.Mukesh Ambani, CMD Reliance Industries, to bring down cost of urea production by 18 per cent and has helped save about Rs 4,760 crore in fertilizer subsidy.

According to the Fertilizer Industry Coordination Committee (FICC), the average provisional cost for urea production in 2009 has come down from Rs 13,509 per tonne to Rs 11,084 per tonne after KG-D6 gas replaced costlier alternative fuels like naphtha.

FICC informed Fertilizer Ministry that the energy cost has reduced as a result of use of RIL gas replacing costlier alternative, sources said.

Reliance is currently producing about 55 million standard cubic meters per day of gas from its Krishna Godavari basin fields. Of this over 13 mmscmd is currently being supplied to 15 units producing about 19.7 million tonnes a year of urea.

The company has achieved peak production rate of 80 mmscmd but had to scale back the output as its government-nominated customers were not drawing their allocated quota of gas.

Reliance, all set for LyonDellBasell, raises $ 2 bn

2010-01-13T07:56:00.000-08:00

Mukesh Ambani led Reliance Group on Monday sold shares to mop up $764 million, the third sale in four months that has created a war chest of over $2 billion for its bid to acquire the bankrupt petrochemical firm LyondellBasell.

In a block deal, Reliance sold as many as 3.3 crore treasury stocks at Rs. 1,050 a piece, a discount of nearly five per cent to Friday’s closing, and raised Rs. 3,465 crore ($764 million).

This followed the 2.59 crore treasury stocks it sold last Monday fetching Rs. 2,675 crore. Last September too, Reliance had sold 1.5 crore shares raising Rs. 3,188 crore.

These three sales have resulted in the Mukesh Ambani-led company raising over Rs. 9,300 crore ($2.5 billion) in cash.

RIL, last week, had raised its bid to acquire LyondellBasell to $13.5 billion from the initial $12 billion offered in November.

Credit rating agency Moody’s said following today’s sale, the company has a cash balance of around $4.5 billion and treasury shares worth about $6.5 billion.

“The company is effectively building up a war chest to fund the expansion opportunities. Moody’s thus expects RIL to progressively use its increased financial flexibility for acquisitions, rather than use the proceeds of the share sale to pay down debt,” Moody’s lead analyst Ivan Palacios said.

The rating agency also did not see any immediate impact on the company’s ratings and stable outlook.

Source:http://beta.thehindu.com/business/companies/article79054.ece

Reliance to drill six new wells in KG

2010-01-07T05:00:00.000-08:00

Reliance Industries intends to drill six additional exploration/appraisal wells in the KG-D6 block in 2010. It has proposed to invest $1.5 billion (approx Rs 6,975 crore) more in the proposed block in developing satellite gas finds.
"Six additional exploration/appraisal wells will be drilled this year," said Niko Resources, the
junior partner in RIL-operated KG-D6 block.

RIL has till date made 19 discoveries-- 18 gas and one oil--in deep-sea block KG-DWN-98/3 or KG-D6. Of these, it developed Dhirubhai-1 and 3 gas fields in the first phase at an investment of USD 8.836 billion.

It has now proposed to invest another USD 1.5 billion in bringing to production four satellite finds in the block.

Dhirubhai-1 and 3 fields, which began gas production in April last year, hold 10.03 Tcf of reserves and are currently producing about 60 million standard cubic meters per day. The peak output of 80 mmscmd likely this year, would double gas availability in the country.

The Mumbai-based firm had in July 2008 proposed to develop 9 discoveries adjoining these two giants at a cost of USD 5.91 billion. But after more techno-commercial viability studies, it decided to narrow down to four finds that can be put to production in next 4-5 years.

RIL has already submitted a field development plan to the Directorate General of Hydrocarbons for the four discoveries that it estimates hold 0.6 tcf of recoverable reserves.
Reliance Group holds 90 per cent interest in the block and the remaining 10 per cent is with its other partner Niko Resources.

Source:http://www.thehindubusinessline.com/blnus/02061932.htm

Reliance’s third successive gas discovery in KG Basin

2009-12-22T04:32:00.000-08:00

Reliance Group , the country’s largest private sector company controlled by CMD Shri.Mukesh Ambani, has announced its third successive gas discovery in the exploration block KG-DWN-2003/1 (KG-V-D3), of NELP-V. The deepwater block KG-DWN-2003/1 is located in the Krishna basin, about 45 kilometers off the coast in the Bay of Bengal. The block covers an area of 3288 square kilometres. RIL holds a 90 per cent participating interest (PI) and Hardy Exploration and Production India Inc holds the rest.

The well KGV-D3-R1, the third in this block was drilled at a water depth of 1982 m and to a total measured depth of 4113 m. The objective was to explore the Miocene deep water lobe and onlapping wedges play fairway. Three reservoir zones were encountered at Miocene Level having gross thickness of 4, 23 and 16 metres. The potential of these were evaluated through a wire-line based technology called Reservoir Characterization Imager (RCI).

The discovery namely “Dhirubhai - 44” has been notified to the government of India and the Directorate General of Hydrocarbons. The potential commerciality of the discovery is being ascertained through more data gathering and analysis.

The discovery supplements RIL’s understanding, of the petroleum systems within the block. 3D seismic has been acquired over the entire block area. Besides the above discoveries, several prospects have been mapped at different stratigraphic levels to fulfill the balance minimum work commitment of three wells.

RIL is likely to drill three additional exploration wells on the block before the end of 2010. In August 2005, Reliance and HEPI were awarded D3 block under NELP-V. Reliance is the operator of the block.
Exploration drilling commenced on this block in 2008.

Source:http://ril.com/downloads/pdf/PR22122009.pdf

Ambani Gas Row – Government has every right to regulate gas price: RIL

2009-12-17T23:29:00.000-08:00

RIL counsel Harish Salve made this assertion before the three-member bench of Chief Justice K.G. Balakrishnan, in his counter-arguments in the legal battle with Reliance Natural Resources Ltd (RNRL) over gas supplies from the Krishna-Godavari basin.

"If I challenge the gas utilization policy and the court says 'sorry, you do not have the power', the government will discover the power elsewhere," Salve told the bench, which includes Justice B. Sudershan Reddy and Justice P. Sathasivam.

"The government is opening various sectors to private players. If we do not behave responsibly, we may earn profit for 15 days, but will eventually be out of business."

"The only suitable agreement for supply of gas to the REL's Dadri power plant is supply of gas under the gas utilization policy and at the price arrived at as per the formula approved by the empowered group of ministers," he said.

This decision by the ministerial group is applicable to all the gas produced by Reliance Industries, Salve said, adding this compelled his client to supply gas to specific customers, in defined quantities and at the notified price.

The government has also specified that a firm commitment on gas supplies can be made only for five years, based on the ministerial panel's recommendations, he said.

Source:http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/Government-has-every-right-to-regulate-gas-price-RIL/articleshow/5348440.cms

Reliance pumping out over 50 mmscmd gas from KG Basin: Government

2009-12-11T02:24:00.000-08:00

Reliance Industries (RIL) is currently producing over 50 million standard cubic meters per day (mmscmd) of natural gas from the KG Basin D-6 fields, the government said.

"The current gas production from the D-1 and D-3 gas fields is about 48 mmscmd and from MA (oil) field is about 2.3 mmscmd in the KG-D-6 Block," Minister of State for Petroleum and Natural Gas Jitin Prasada told the Lok Sabha in a written reply.

The gas produced from the KG-D6 Block is being allocated and sold as per the directives of the Empowered Group of Ministers, he said, adding the peak gas production of about 80 mmscmd from the field is likely to be achieved by the middle of next year.

"The government has not, till date, fixed or approved the quantum of marketing margins for sale of natural gas by any contractor," he said, adding "the issue is discussed and decided between the seller and the buyer, as a part of the settlement of the terms and conditions of the gas sales and purchase agreement (GSPA)."

Source:http://www.business-standard.com/india/news/ril-pumping-out-over-50-mmscmd-gaskg-basin-govt/80500/on

Reliance Gas Dispute – RIL Stands Tall

2009-12-04T04:53:00.000-08:00

Reliance Industries operated KG-DWN-98/3 gas field, also known as KG D6 has run into controversies immediately after the major gas find in 2002. Whether it is the quantum of the discovery, capital expenditure for the development, legal tussle with NTPC over the contractual obligation or the Memorandum of Understanding (MOU) signed with Reliance Natural Resources (RNRL) for supplying 28 mmscmd gas, Reliance has witnessed numerous allegations.

Reliance Group, however, has proven these accusations erroneous time and again. RIL had estimated the reserves of KG D6 block to the tune of 14 trillion cubic feet (tcf), which was downplayed by many to the maximum of 5-6 tcf. Today, with limited number of wells drilled, the commercially recoverable reserves are approved at 11.3 tcf by the Government. The in-place reserves are estimated to the extent of 40 tcf by various analysts. Similarly, the capital expenditure of $8.8 billion was said to be escalated. The Government, however, itself came forward in defense of the accusation arguing that the reserve estimates along with peak production level has doubled since the initial development plan resulting in increased capital cost due to three-fold rise in commodity prices, equipment prices, rig charges and engineering cost.

As far as NTPC issue is concern, RIL has made it clear that disagreement with NTPC is not on the price of $2.34 per mmbtu but on unlimited liability clause which coerces the RIL to pay for entire cost of substitute fuel in case of gas supply failure even in case of force-majeure by the company. RIL only wants the penalty charges to be capped that too as low as half of what is applicable for NTPC in case of its inability to off-take the gas, which may force the RIL to flare a sizable amount of precious gas.

Even in case of RNRL, Reliance agrees to supply the said quantity of gas at agreed price provided the Government consents on price and marketing freedom. In fact, RIL tried to get the Government certification for price of gas to be supplied to RNRL, however, the latter rejected the same, stating that the price did not match the arms-length criteria of pricing as per the Production Sharing Contract (PSC).

Source:http://oilandgasindia.blogspot.com/2009/12/where-does-gas-price-of-42-per-mmbtu.html

Reliance ropes in Colombia’s Ecopetrol for Exploration

2009-12-04T03:27:00.000-08:00

Indian energy major Reliance Industries Ltd. has signed a deal with Colombian state oil firm Ecopetrol for two deepwater blocks in Colombia.

Reliance Exploration and Production DMCC (REP) has signed an agreement with Ecopetrol under which the Colombian firm would take a 20 per cent stake in the two deepwater blocks -- Borojo North Block 42 and the Borojo South Block 43.

The two blocks cover an area of 8,000 sq km. In water depths ranging from 60-1500 metres, the company said.

REP would hold the remaining stake in the two blocks and the deal is subject to approval of the Columbia's upstream regulator, company said.

Source:http://www.business-standard.com/india/news/ril-ecopetrol-ink-pact-for-deep-water-blocks/80002/on

Reliance Gas from KG adding value to India’s GDP

2009-12-04T01:47:00.000-08:00

The recent CSO estimate of India’s GDP for the second quarter of 2009-10 came like a whiff of fresh air amidst the gloomy scenario that was painted last week by the Dubai debt crisis. GDP growth has received its surprising but much-needed impetus from a booming mining and quarrying sector, which grew by 9.5% in the second quarter of 2009-10 as compared to 3.7% recorded during the second quarter in 2008-09. This has largely been attributed to a bolstering growth in output from Reliance Industries’ Krishna Godavari (KG) basin, whose gas output alone is expected to shore up India’s GDP by nearly 0.3% every year.

India’s natural gas output from domestic fields has now reportedly exceeded the threshold figure of 100 million cubic metres per day (mmcmd) of output as KG D6 has started operating in full swing. The upstream natural gas sector in India is a classic example of duopoly and comprises two major players, namely RIL and ONGC. Despite holding a couple of big road shows within and outside the country, the much-hyped latest round of NELP could hardly make any perceptible difference in terms of increasing the number of players in the upstream sector. Interestingly,Reliance’s latest reported output of 50.15 mmcmd from KG-D6 fields in the KG basin surpassed 49.6 mmcmd of natural gas output reported by ONGC, thus making RIL effectively the largest player in the natural gas upstream sector. The lion’s share of ONGC’s gas output comes from its Bassein and Mumbai High fields, which reportedly account for 42 mmcmd of natural gas output. A relatively meagre 16 mmcmd of output has been reported from Panna/Mukta and Tapti fields of BG India, which again is a joint-venture between the BG Group, Reliance Group and ONGC. The residual amount comes primarily from the Rawa field, where stakeholders include Cairn Energy and ONGC.

RIL’s natural gas generated from KG basin in Bay of Bengal has heralded almost a new era inIndia’s energy sector with far-reaching implications for India’s ‘clean energy’ security, especially in view of the heightened concern for climate change. RIL has already developed the D-1 and D-3 fields in KG basin and is pursuing a new integrated development plan for its R-series of natural gas finds and nine other satellite discoveries in the D6 block. The combined potential for these gas finds and satellite discoveries has reportedly been estimated as lying between 2-3 trillion cubic feet. Until the middle of this year, ONGC and its western assets in the Mumbai offshore area have dominated India’s oil and gas industry. However, ONGC is now resorting to a look-east policy as the production of Mumbai has started deteriorating and it is planning to recoup its losses by developing its eastern assets (oil and gas discoveries in the KG basin off the east coast). Moreover, RIL’s D6 block development in record time has also posed a serious challenge for the public player.

Meanwhile, ONGC has also stated on its Web site that a draft proposal on revision of Administered Price Mechanism (APM) gas produced by national oil companies has reportedly been circulated by MoPNG on the basis of recommendation of Tariff Commission (TC) for consideration and approval by the Cabinet Committee on Economic Affairs. The TC essentially wants to bring parity between the APM price and the price of the gas produced from KG basin by 2013 in a phased manner. The price of natural gas, which is produced by public players like ONGC from government nominated blocks, is governed by APM and lies well below the free market price of natural gas. This leads to a substantial loss for them. The loss in the last financial year itself has been reported at Rs 47 billion. Thus, ONGC is expected to benefit considerably if the proposal gets finally approved. Under the proposal, ONGC’s APM gas price would be Rs 4,142 per thousand standard cubic metres (mscm) {$2.32 per million British thermal units (mmbtu)}, up from Rs 3,200 mscm ($1.79 mmbtu). This is indeed a welcome proposition and would provide a big push to the public sector gas producer. However, MoPNG should also get back to its agenda of complete deregulation of prices of refined petroleum products, especially auto-fuels like petrol and diesel; otherwise after revision of APM gas price, CNG might just lose out on its competitive edge as a cleaner and cheaper automobile fuel in the cities that are currently receiving it.

The development of indigenous source of cleaner and cheaper fuel like natural gas would serve the dual purpose of reducing our unhealthy dependence on imported oil and enhance our ‘clean energy’ security, besides boosting our GDP. Furthermore, the International Energy Agency also recently reckoned that there would be a continued glut in the natural gas market, which would depress the gas price in the near and medium term.

Thus, the international liquefied natural gas producers are expected to look eastwards, especially towards India and China as first ports of call. This would provide a great opportunity to India in reducing its dependence on highly priced imported oil and shift to an environmentally benign fuel, and thus, save largely on its precious foreign exchange.

Source:http://oilandgasindia.blogspot.com/2009/12/rils-kgd6-adding-contribution-to-indias.html

Reliance beats ONGC, becomes country's largest gas producer

2009-12-01T04:53:00.000-08:00

Reliance Group has become the largest natural gas producer in the country with its over 50 million standard cubic meters per day (mscmd).

This is the first time it has surpassed ONGC’s 49.6 mscmd output.

Reliance Industries gas production from its D6 fields in the Krishna Godavari basin has reached to 50.15 mscmd according to the regular output report Reliance sent to the oil ministry.

India’s gas output also exceeded 100 mmcmd with the contribution from KG D6. The world’s second most populous nation also draws 16 mmcmd from BG India’s Panna/Mukta and Tapti fields.

The ministry official said 22.84 mmscmd of D6 gas is sold to power companies, 15.19 mscmd to fertiliser units and 5.05 mmscmd to steel manufacturers. Refineries, including those of RIL, recently named as additional customers, are drawing about 5 mmscmd.

KG D6 is expected to increase its gas flow to 60 mmcmd by end of December and 65 mmcmd in January.

The project will reach highest peak production of 80 mmcmd in the second half of 2010.

Source:http://www.business-standard.com/india/news/ril-topples-ongc-as-largest-gas-producer/378206/

Reliance's D6 gas lights up idle capacity

2009-11-30T04:52:00.000-08:00

With the Reliance Industries Ltd (RIL) operated KG-basin D6 block gas flowing in, the gas-based power generation across the country has registered a healthy turnaround. In October, a total of 15 gas-based stations recorded a plant load factor (PLF) of over 80 per cent due to improved fuel availability, as against around just 50 per cent last year.

The spurt in gas-based production has more or less compensated for a dip in hydro generation in the northern and eastern regions, where reservoir storage was 35 per cent and 33 per cent respectively below last year's levels.

Increased generation by gas stations, especially those in the south, have also come at a time when coal-based generation at a number of stations, including key NTPC ones, have faltered due to a botched-up coal tender. Domestic natural gas production in April-October period was up 31 per cent at 25.389 bcm (billion cubic metres). Reflecting the jump in gas production, generation in gas-based plants shot up 34 per cent during April-October. “Surplus is also available due to low offtake by other sectors. The utilisation of the surplus gas has resulted in better utilisation of idle capacity,” an official with the Central Electricity Authority said.

Source:http://www.thehindubusinessline.com/2009/11/30/stories/2009113051160100.htm

RIL refineries to get one-fifth of gas from KG-D6

2009-11-26T04:52:00.000-08:00

RIL has been allocated 2.34 mmscmd of gas from its KG D-6 fields to meet just about one-fifth of the gas requirement at its twin refineries at Jamnagar in Gujarat.

RIL had sought 11.80 million standard cubic meters per day of KG D-6 gas to meet feedstock requirement at its twin refineries but it got only 2.34 mmscmd.

An Empowered Group of Ministers (EGoM) had on October 27 allocated one-fourth of the additional 20 mmscmd gas that RIL is ready to produce from KG-D6 to refineries.

"Refineries had projected a demand of 25.20 mmscmd but since the EGoM allocated only 5 mmscmd, the same has been allocated on pro-rata basis," an oil ministry official said.

State-run Indian Oil got 1.6 mmscmd while HPCL and BPCL have been allocated 0.26 and 0.20 mmscmd respectively. Private sector Essar Oil would get 0.60 mmscmd against a demand of 3 mmscmd for use at its Vadinar unit in Gujarat.

Reliance Group, which had so far not been allocated any gas from KG D-6, is currently buying imported liquefied natural gas at 60 per cent premium to the price of gas from its own block in the Krishna-Godavari Basin.

Of the 20 mmscmd, 12.9 mmscmd has gone to power plants, the official said, adding the new customers notified to Reliance include state-run NTPC who has been given 2.71 mmscmd.

The government had previously fixed users for the first 40 mmscmd output from KG-D6 fields which has transformed the electricity scenario and boosted growth. Of the initial output, 18 mmscmd had gone to power plants.

The official said out of the additional allocation made on firm basis, NTPC will get 2.71 mmscmd, Lanco's Kondapalli plant (1.46 mmscmd), GMR Energy's Tanir Bavi (0.88 mmscmd - both in Andhra Pradesh), Rithala (0.40 mmscmd), Bawana plants (0.93 mmscmd - both in Delhi) and Gujarat's Uran plant (1.40 mmscmd).

The government had previously fixed users for the first 40 mmscmd output from KG-D6 fields which has transformed the electricity scenario and boosted growth. Of the initial output, 18 mmscmd had gone to power plants.

Source:http://business.rediff.com/report/2009/nov/25/reliance-ril-refineries-to-get-one-fifth-of-gas-from-kg-d6.htm

Reliance reopens 900 oil stations, selling at PSU rates

2009-11-25T07:53:00.000-08:00

According to Reliance’s refinery business head P Raghavendran, most of the oil stations are in the Western and Southern markets are selling fuels at the price being offered by state-run oilmarketers. The prices of governent firms are cheaper than market costs due to subsidy.

"We are selling where we can match PSU price," he said.

Raghavendran said we are the only nation that is so heavily dependent on imports to meet oil needs yet subsidies the fuel heavily.

IOC, BPCL and HPCL get bonds from the government and discounts from crude producer ONGC for selling petrol, diesel, domestic LPG and kerosene below cost.

Unlike sectors like fertilizers, the oil subsidy is limited only to public sector firms, he said, and pointed out that in the 2008-09 fiscal, the government issued oil bonds worth over Rs 103,000 crore to PSU fuel retailers for selling petrol, diesel, domestic cooking gas and kerosene below cost.
The same compensation is not given to private retailers like Reliance Industries, Essar and Royal Dutch Shell, he pointed out.

Source:http://business.rediff.com/report/2009/nov/24/reliance-reopens-900-oil-stations-selling-at-psu-rates.htm

Lyondell deal will up RIL's refining margins: Experts

2009-11-23T06:41:00.000-08:00

Reliance Industries (RIL) is offering about $12 billion to buy a controlling interest in bankrupt chemical company LyondellBasell Industries to create one of the largest petrochemical firms in the world, two sources with direct knowledge of the deal said.

“The offer is in the vicinity of about $10 to $12 billion,” one source said, while another said it was around the upper end of the band. The two sources declined to be named as they are not authorised to speak to the media.

Both Reliance and LyondellBasell did not disclose the size of the offer in their statements.

Reliance Group, India’s largest conglomerate, has been looking to expand, taking advantage of low valuations to delve into international markets.

The company is aiming to attain global scale for its conventional energy platform — petrochemicals, refining and oil and gas exploration — and invest in its new businesses such as retailing and alternative energy, chairman Mukesh Ambani said this week at the company’s annual meeting of shareholders.
Vijay said there were some concerns when RIL promoters sold treasury stock and now the management was keeping its word when it had promised some global acquisitions.

“The RIL stock too has been doing well in the last two weeks compared to the battering it received since June. It is still not on our buy list yet because of the huge overhang of the Supreme Court case [relating to gas] but this is surely a positive development.”

‘How you read the deal is a function of the price RIL pays,” said Adrian Mowat of JPMorgan.
“We suspect they will be pretty cautious in the price that they are willing to pay.”

Mowat added that RIL’s refining margins, which were currently under pressure, would improve if the Lyondell acquisition went through.

Source:http://www.moneycontrol.com/news/business/lyondell-deal-willrils-refining-margins-experts_426528.html

RIL questions RNRL's demand for gas without plant

2009-11-17T03:05:00.000-08:00

There was an assurance given for the supply of gas, but the other side (Anil Dhirubhai Ambani Group) failed to establish the power plant. Now they want to make money out of the gas which was never contemplated in the demerger scheme,” Senior Advocate Harish Salve, appearing for RIL, said before a Bench headed by Chief Justice K G Balakrishanan.

Continuing his arguments in the high-voltage gas row, Salve said the assured supply of gas was the vital ingredient of the agreement for the power plant to be established by the RNRL at Dadri, near Ghaziabad in Uttar Pradesh.

“Therefore, no court can modify the scheme which they (RNRL) sought,” Salve submitted before the Bench, also comprising Justices B Sudershan Reddy and P Sathasivam.

When the day’s hearing was about to conclude, RNRL’s Counsel Ram Jethmalani contended that seven of the affidavits filed in the apex court by RIL’s Directors relating to the family MoU of 2005 were not a part of the record when the dispute was heard in the Bombay High Court.

Jethmalani submitted that if RIL consents and the affidavits were allowed to be the part of the records then, under company court procedure, the seven directors were open to cross-examination in the court.

The Ambani brothers are locked in a bitter battle over the supply and price of the gas from the K-G basin. While RNRL is seeking gas at a committed price of $2.34 per million British thermal unit (mBtu), RIL says it cannot honour the commitment made in the family agreement due to government’s pricing and gas policies.

However, before the intervention by RNRL, Salve said the scheme of demerger provided that the gas has to be supplied up to the delivery point, after which it would be for the Anil Ambani-led Reliance Energy Ltd (REL) to transport the gas to its power plant.

“The suitable arrangement would be that RNRL take the gas from delivery point for REL. However, what they wanted is that, from the delivery point, RNRL would take the gas and market it,” he said, adding that “no court could grant such a relief to RNRL for taking the natural resource and making profit by marketing”.

Reliance said supply of gas to RNRL at $2.34 per mBtu was not possible as it would have to make up for the loss from its own pocket.

Reports of my quitting incorrect: ASG Parasaran Meanwhile, Mohan Parasaran, the government’s counsel in the Ambani brothers gas dispute, has said that he had never threatened to withdraw from the case on the issue of inclusion of more lawyers in the team.

Additional Solicitor General (ASG) Parasaran last week wrote to Petroleum Secretary R S Pandey saying he had never threatened to withdraw from the case or resign as ASG on talks on including more lawyers in the government team, official sources said.

Source:http://oilandgasindia.blogspot.com/2009/11/ril-questions-rnrls-demand-for-gas.html

Mukesh Ambani dons milkman's hat with 'Dairy Pure'

2009-11-15T04:31:00.000-08:00

Milk is industrialist Mukesh Ambani’s newest business muscle and his corporate dairy is looking for refrigerator space at mom and pop stores, in addition to vending from Reliance Retail stores.

With the beginning of sale of ‘Dairy Pure’ through general milk retailers, as opposed to mostly through Reliance Retail-owned stores now, the company expects further growth in this business.

The milk business turnover grew nearly 3-fold to over Rs 178 crore last financial year.

Living up to its reputation of entering a market with a competitive edge in terms of pricing, Reliance Retail is trying to lure customers with 10 per cent extra milk in every packet than that of its rivals for the same price.

Besides Reliance stores, the milk brand is also being sold “through general trade (including milk retailers) in Haryana, Punjab, Andhra Pradesh, Tamil Nadu, Rajasthan, NCR (National Capital Region) and Himachal Pradesh,” the spokesperson added.

On their part, rivals are welcoming a large corporate in the market saying it would benefit both farmers and customers, but are not perturbed by the competitive pricing as they consider it too small a player as yet to eat into their pie.

Still, Reliance Dairy Foods Ltd, the milk and other dairy products subsidiary of petrochemicals and refining major Reliance Industries, saw its turnover grow nearly three-times last financial — from Rs 65.77 crore in 2007-08 to Rs 178.05 crore in 2008-09.

However, its loss after tax widened from Rs 3 crore in 2007-08 to Rs 4.5 per cent in the last financial year.The company believes the business would grow further as it was also looking at expanding product portfolio as also processing and packaging facilities.

“We see this business further growing with the extension of our product portfolio. Reliance Retail currently has its processing and packaging facilities in Andhra Pradesh, Haryana and Rajasthan and would look at expanding this over a period of time in other states,” the spokesperson said.

Source:http://economictimes.indiatimes.com/news/news-by-industry/cons-products/food/Mukesh-Ambani-dons-milkmans-hat-with-Dairy-Pure/articleshow/5232309.cms

RIL hunts for shale gas

2009-11-15T03:32:00.001-08:00

Reliance Industries (RIL), which has executed the world’s single largest refinery complex at one place, and one of the most complex gas projects in the depth of the Bay of Bengal on the East coast of India, may join global oil majors in search of shale gas.

Reliance Group has been studying the breakthroughs and the new technologies that are being used in producing shale gas that is now a huge rage in the US. “We are studying the prospects and we will take a decision on the investment in the next six months. RIL is looking at the overseas markets and it plans to go big in new technology. We now have the balance sheet to support such a move,” a senior RIL executive, who did not wish to be named, told ET.

Shale gas is natural gas produced from shale — a fine grained sedimentary rock composed of flakes of clay and minerals like quartz and calcite. “The future of energy is a low-carbon regime. Shale gas is one such example. It is somewhat like coal-bed methane and is on land. The US has made major strides in the technology in shale gas that has made it now a commercial proposition,” the executive in the know said.

According to Vijay Kelkar, former petroleum secretary and chairman of the 13th finance commission, it’s innovative technology using horizontal drilling (allowing the gas to be brought out easily) that made this fuel a commercial possibility. Mr Kelkar had floated a paper on how such non-conventional possibilities existed in gas hydrates — deposits in sea — near the Andaman and Nicobar Islands.

RIL, which has used advanced technology in its exploration projects in the Krishna-Godavari basin, is betting on its expertise in technology to tap unconventional energy sources in the energy value chain. The company has been eyeing unconventional energy sources, such as solar, for some time now. But industry analysts are of the view that a fuel like shale gas is perhaps the best bet as it has already been proved as a commercial proposition.

Source :http://pgdm-scholar.blogspot.com/2009/11/ril-to-join-hunt-for-shale-gas.html

IOC seeks gas from RIL

2009-11-15T02:48:00.000-08:00

Indian Oil Corporation has sought around 23 mscmd of gas from Reliance Industries (RIL) operated Krishna-Godavari Basin D6 block.

The IOC Director (Planning and Business Development), BM Bansal, told Business Line that “the Petroleum Ministry had asked all the refineries to submit their gas requirements. Our requirement in next three years is expected to be around 23 mscmd, which we have communicated to the Ministry.”

The refineries require gas for operational purposes. Earlier, refineries were using diesel, furnace oil, and naphtha, for operation purposes but now they are shifting to gas which is a cleaner fuel.

Elaborating Bansal said, “We can take the said quantum once all our refineries are connected to pipeline network. At present, we can take gas at our Mathura and Gujarat refineries.”

While the Panipat refinery will be connected in next three-four months, infrastructure is not ready for Haldia, Barauni, and Guwahati refineries.

Currently, IOC can use gas only at its two refineries – Mathura and Gujarat. It uses 2 mscmd of gas, but once all the refineries are connected the requirement is expected to go up significantly, sources said.

RIL is producing around 45 mscmd of gas from its prolific D6 block. After allocating gas according to the Gas Utilisation Policy from the initial output of 40 mscmd from the block to the priority sectors (power, fertiliser, steel, city gas distribution, and gas-based LPG plants), an Empowered Group of Ministers in October allocated additional 50 mscmd gas (20 mscmd is on firm basis and 30 on fallback).

Additional allocation will enable Reliance to ramp up its production. The fall-back allocation refers to the quantum which the operator would be able to produce over and above its sustained output level. RIL is expected to reach 60 mscmd by December. Of the 20 mscmd gas allocated on firm basis, two-third of produce has been given to power plants. Apart from them petrochemical plant (RIL’s plant has got 1.918 mscmd) as well as some refineries will get the gas.

Source : http://ashishmishrapgdmiimtmeerut.blogspot.com/2009/11/indian-oil-corporation-has-sought.html

RIL questions RNRL's demand for gas without plant

2009-11-13T03:01:00.000-08:00

The Mukesh Ambani questioned in the Supreme Court the demand of brother Anil Ambani for the immediate supply of gas from the K-G basin, saying that it can not be done in the absence of the proposed power plant as per the agreement reached between them.

There was an assurance given for the supply of gas, but the other side (Anil Dhirubhai Ambani Group) failed to establish the power plant. Now they want to make money out of the gas which was never contemplated in the demerger scheme,” Senior Advocate Harish Salve, appearing for Reliance Group, said before a Bench headed by Chief Justice K G Balakrishanan.

Continuing his arguments in the high-voltage gas row, Salve said the assured supply of gas was the vital ingredient of the agreement for the power plant to be established by the RNRL at Dadri, near Ghaziabad in Uttar Pradesh.

“Therefore, no court can modify the scheme which they (RNRL) sought,” Salve submitted before the Bench, also comprising Justices B Sudershan Reddy and P Sathasivam.

When the day’s hearing was about to conclude, RNRL’s Counsel Ram Jethmalani contended that seven of the affidavits filed in the apex court by RIL’s Directors relating to the family MoU of 2005 were not a part of the record when the dispute was heard in the Bombay High Court.

Jethmalani submitted that if RIL consents and the affidavits were allowed to be the part of the records then, under company court procedure, the seven directors were open to cross-examination in the court.

The Ambani brothers are locked in a bitter battle over the supply and price of the gas from the K-G basin. While RNRL is seeking gas at a committed price of $2.34 per million British thermal unit (mBtu), RIL says it cannot honour the commitment made in the family agreement due to government’s pricing and gas policies.

However, before the intervention by RNRL, Salve said the scheme of demerger provided that the gas has to be supplied up to the delivery point, after which it would be for the Anil Ambani-led Reliance Energy Ltd (REL) to transport the gas to its power plant.

“The suitable arrangement would be that RNRL take the gas from delivery point for REL. However, what they wanted is that, from the delivery point, RNRL would take the gas and market it,” he said, adding that “no court could grant such a relief to RNRL for taking the natural resource and making profit by marketing”.

RIL said supply of gas to RNRL at $2.34 per mBtu was not possible as it would have to make up for the loss from its own pocket.

Reports of my quitting incorrect: ASG Parasaran Meanwhile, Mohan Parasaran, the government’s counsel in the Ambani brothers gas dispute, has said that he had never threatened to withdraw from the case on the issue of inclusion of more lawyers in the team.

Additional Solicitor General (ASG) Parasaran last week wrote to Petroleum Secretary R S Pandey saying he had never threatened to withdraw from the case or resign as ASG on talks on including more lawyers in the government team, official sources said.

Source:http://oilandgasindia.blogspot.com/2009/11/ril-questions-rnrls-demand-for-gas.html

EGoM may give gas to power, refinery firms

2009-10-27T05:08:00.000-07:00

An Empowered Group of Ministers headed by Finance Minister Pranab Mukerjee will meet shortly to decide on allocation of natural gas produced by Reliance Industries to users in power, petrochemical and refinery sectors.

RIL now has capacity to produce at least 65 million cubic meters per day (mmscmd) of gas from its eastern offshore KG-D6 fields but is forced to restrict the output to under 35 mmscmd for lack of government-identified buyers.

"The previous EGoM had fixed the price of gas (at USD 4.205 per million British thermal unit) for five years and so that continues," he said.

Demands from power plants, petrochemical units and refineries, including those owned by Reliance, would be considered.