Mumbai: After an eight year pause on its exploration and production activities, Reliance Industries Ltd (RIL) has begun to relook at the segment.
In its financial presentation made to analysts for its third-quarter earnings on Monday, RIL said, “Declaration of commerciality reviewed by management committee for D55, D29 and D30 discoveries of KG-D6 block and for D32 discovery of NEC25 block.”
The presentation added that submission of development plan for the fields is expected by the end of December 2017 and for its D6 R-Cluster Development, evaluation of bids for long lead items is underway.
“Development of RIL’s east coast fields—R-series, MJ (D55) and D29/D30 will be contingent on resolution of arbitration cases and approvals. Optimistically production from R-series could start in 2020,”said Motilal Oswal in its report dated 16 January.
RIL and its partners are embroiled in multiple arbitrations against the government related to KG-D6.
Ending the disputes is required for companies to take full advantage of the higher prices that was made available by the government last March through a policy revision which aims to encourage development of deepwater fields.
Last March, oil minister Dharmendra Pradhan had said that the new policy is expected to boost gas output by 35 million standard cubic meters a day and help projects worth Rs.1.8 trillion ($27 billion). Among there projects are two blocks held by RIL and partners with an estimated reserves of 2.53 trillion cubic feet.
During the third quarter production from its KG-D6 field declined to 7.5 million standard cubic metres per day (msmcd). RIL is trying to sustain production through well optimization. BP Plc and Niko Resources Ltd partner RIL in its KG-D6 block. Niko which partnered RIL in NEC 25, which lies off the Odisha coast, relinquished its 10% stake in the field in November 2015, owing to a cash crunch.
“RIL and their partners have to submit field development plan (FDP) for the satellite and MJ discovery by Dec’17 and production from one of these is likely to start in 2021 and the other discovery in 2022,” said ICICI Securities in a report dated 17 January.