New exploration outlook for RIL

New exploration outlook for RIL

Private sector E&P major, Reliance Industries (RIL), is likely to commence its D-3 exploration programme in the Krishna Godavari basin by December 2009.

However, the exact timing of commencement of the fresh exploration in the block would be dependent on the availability of a deepwater drilling rig to the operator.

As per sources, the operating committee (OC) has recently decided to target high amplitude anomalies in the Pliocene and Miocene geological horizons for the proposed drilling programme, tentatively scheduled for December 2009.

The new location will be at a distance of 20km southeast of the Dhirubhai 39 and 41 discoveries. RIL recently suspended the G-1 well in the block, after the setting of the 20" casing at 1,625 metres; G-1 is the third well in D-3.

The operator’s long term plan is to commence development concept studies, after which Dhirubhai 39 and Dhirubhai 41 gas discoveries would be drilled in the block, towards the end of 2010.

The management committee (MC) of the block – comprising of representatives from the petroleum ministry, Directorate General of Hydrocarbons

(DGH) and the participating companies - is in the process of approving the appraisal programme for both discoveries. Dhirubhai 39 and Dhirubhai 41 are two major gas discoveries made by Reliance in the block during 2008. D-3 was previously operated by ONGC before it was put on offer under the New Exploration Licensing Policy.

We believe that the E&P news flow will continue to positively impact the stock price, particularly that pertaining to D-3 and D-9. We continue to remain POSITIVE on the company, with a target price of Rs2,340.