RIL defends natural gas discovery work against audit report

By OGJ editors

Reliance Industries Ltd., Mumbai, has refuted a critical report by the government auditor about operation of its deepwater KG D6 gas discovery, saying the project “has set a global benchmark for effective, efficient completion and cost competitiveness.”

The Indian government’s Comptroller and Auditor General (CAG) this week sent Parliament a report alleging irregularities of work conducted under the production sharing contract covering RIL’s large deepwater gas discovery on the KG D6 block offshore eastern India.

RIL has been under pressure from the Directorate General of Hydrocarbons to increase drilling in the area because production has lagged behind projections (OGJ Online, Aug. 4, 2011).

The CAG report raised questions about cost overruns, the absence of acreage relinquishment between operational phases, and structure of the PSC.

In a Sept. 9 press release, RIL cited studies by three independent consulting firms saying the company’s work under the PSC met industry standards.

“RIL commenced gas production from KG D6 in 6.5 years from discovery, in comparison to the global average of 9-10 years for similar deepwater production facilities,” it said.

The firm brought its large Dhirubhai 1 and 3 discoveries, in 600-1,200 m of water in the Bay of Bengal, on production in April 2009 (OGJ Online, May 5, 2009).

In said the independent studies found its costs not to have been overstated and to have been in line with industry norms. One of the findings was that India’s fiscal system “does not create any incentive for the contractor to indulge in overspending,” RIL said.

KG D6 is one of 21 blocks in which BP recently completed purchase of 30% interests from RIL in a deal forming a joint venture by the companies for Indian exploration and development (OGJ Online, Aug. 30, 2011).

RIL cited the BP arrangement as validation of its position in relation to CAG.

“With its newly established partnership with BP, RIL is confident of unlocking the full potential of KG D6 and other blocks,” it said.

Related Articles

Lukoil starts 2D seismic survey on Block 10 in Iraq

04/11/2014 OAO Lukoil has started a 2D seismic survey on Block 10 in southern Iraq that is expected to cover 2,000 km within 16 months. BGP Inc. is the seismi...

Statoil makes oil, gas discovery north of Valemon field

04/11/2014 Statoil ASA, together with its Valemon unit partners, made an oil and natural gas discovery in the Valemon North prospect in the North Sea, just 10...

Proved reserves of US crude oil reach 36-year high in 2012

04/10/2014 US proved reserves of crude oil at yearend 2012 were estimated at 33.4 billion bbl, up 15.4% from 2011 and the highest since 1976, according to a r...

GeoPark makes oil discovery in Colombia

04/09/2014 GeoPark Ltd. reported the successful drilling and testing of the Aruco 1 exploration well on the Llanos Block 34 in the central Llanos basin in Col...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected