Mukesh announces new crude oil discovery in Krishna Godavari Basin

Mumbai, June 27: Reliance Industries Ltd(RIL) Chairman Mukesh Ambani today announced that new crude oil has been discovered in two wells in the Krishna Godavari (KG) basin, especially in the KG-III-6 shallow water block.

Although not forthcoming on the details of discoveries, Mr Ambani at the company's 32nd AGM here said,''More than size, these discoveries signify a large geological play that could result in future discoveries.'' He said,''RIL recently had a crude oil discovery in the MA1 well in the deep water D6 Block in the Krishna Godavari basin'', while pointing out that ''as Reliance moves ahead, oil and gas exploration and production would undoubtedly be the highest value creating business.''

Elaborating on the RIL's exploration and production(E&P) plans, he said ''For Reliance, oil and gas exploration and production is an opportunity to strengthen energy security for India. This endeavour is, by far, the most spectacular expression of the expansiveness of the company.'' RIL explores for oil and gas in about a third of India's prospective areas, he said,''This commitment to a larger national objective was deepened last year with the addition of five new exploration blocks.'' Not only that, Mr Ambani added that new discoveries reinforced RIL's excitement and engagement with energy security.

Testing in two zones, located three kilometres below sea level, has shown significant presence of oil, he said pointing out that the potential of this discovery was under evaluation.

Reliance has embarked upon an aggressive exploratory drilling program. In the meantime, the company continues to develop the world-scale gas discoveries made in previous years. The Directorate General of Hydrocarbons has declared the six gas discoveries in the NEC25 block of the Mahanadi basin as commercial.

Currently, Reliance is working on the expeditious monetisation of the discoveries made in the Krishna Godavari and Mahanadi basins.

This entails one of the largest gas development projects in the world to transport gas through a 48 inch, 1,386 kilometre east coast to west coast pipeline, traversing the states of Andhra Pradesh, Karnataka, Maharashtra and Gujarat. It is implementing this project through Reliance Gas Transportation Infrastructure Limited (RGTIL) in a contract and common carrier framework.

As gas transportation is a regulated business, RIL will have control on pipeline management while not having the obligation to invest in the equity of RGTIL.

The project is on schedule, with all necessary Government approvals in place, major contracts awarded and delivery to consumers envisaged to take place by the second half of the financial year 2008-09.

This delivery time target represents less than six years from the time of announcement of the discovery and ranks among the fastest turnarounds for deepwater gas development projects in the world.

Reliance continues to make good progress with the Coal Bed Methane project as well as with production from the Panna-Mukta Tapti fields.

On the international front, Reliance is building a portfolio of exploration acreages in known petroliferous regions in the world, accrued through organic growth and strategic acquisitions.

The portfolio so far consists of production in Yemen at a rate of 2,000 barrels per day, peaking to 20,000 barrels per day in the year 2007, while exploration in Oman is progressing ahead of schedule. That apart, it has commissioned Seismic survey in the Pacific Ocean, off the coast of Colombia and also exploration block in oil-rich East Timor.

UNI