Mumbai: The country’s most valuable company, Reliance Industries Ltd (RIL), has found more natural gas in the Krishna-Godavari (KG) basin off India’s eastern coast. The company’s shares rose after it announced the discovery.
RIL has not given estimates of the find at an exploratory well named Dhirubhai-44 but said in a statement that it is analysing data to determine commercial potential.
RIL shares rose 0.7% to Rs1,023.75 at 12:08 pm in the Bombay Stock Exchange and closed at Rs1,018.8 apiece, up 0.22%, on a day the bourse’s benchmark Sensex index gained 0.55% to close at 16,692 points.
The discovery may help billionaire chairman Mukesh Ambani increase the firm’s income from selling gas in the world’s second fastest growing major economy, where the fuel’s availability is half the quantity needed to run power, chemicals and fertilizer plants.
RIL plans to produce 80 million cubic metres of gas from India’s largest field, KG-D6, by next year and double the nation’s output of the cleaner burning fuel.
This is the third discovery at the KG-D3 block on the Bay of Bengal, which has an area of around 3,288 sq. km and provides for the drilling of a minimum of six exploration wells in the first exploration phase. Three of the remaining wells are likely to be drilled before the end of 2010.
RIL, also the operator of the block, holds a 90% participating interest in the KG-D3 block while British firm Hardy Exploration and Production India Inc. holds the rest. In August 2005, Reliance and Hardy were awarded the area under the fifth auction round of India’s new exploration licensing policy.
Tuesday’s discovery in the KG-D3 block, located around 45km off the coast and in the vicinity of the prolific KG-D6 block, “supplements RIL’s understanding of the petroleum systems within the block”, the company said in a statement.
In end-October, RIL and Hardy had to “abandon” the first exploration well in KG-D9—another deep-sea block in the Krishna-Godavari basin—after encountering “poor reservoir sands.” The two are 90:10 partners for KG-D9 as well.
PTI and Bloomberg contributed to this story.