RIL may get nod this month to invest $1.452bn in Cauvery basin
New Delhi: Reliance Industries may this month win approval for USD 1.452 billion investment for developing a natural gas find it has made in a Cauvery basin block off the Tamil Nadu coast several years back.
RIL had made the only discovery in the CY-DWN-2001/2 block in 2007 and had submitted a Declaration of Commerciality (DoC) for the find, which was named D-35, in March 2010 after it carried out drilling of an appraisal well.
But the DoC, a pre-requisite for developing any discovery, was never approved by the Directorate General of Hydrocarbons (DGH) which said the find was not viable at USD 4.2 per million British thermal unit gas price.
After several requests for convening of the block oversight panel meeting to consider the DoC, the DGH on April 15 wrote to Oil Ministry saying the Management Committee should be convened to review the DoC for D-35, sources privy to the development said.
RIL had requested convening of MC meetings in November 2011 and then again in January 2012, March 2012 and April 2012. This year it had requested for a MC meeting through a letter on January 2.
DGH had in its analysis stated that the gas discovery was viable at no less than USD 6 per mmBtu.
Sources said RIL proposes to produce 150 million standard cubic feet per day of gas for 10 years from five development wells on the find. First gas is envisaged in four years.
The discovery, according to the operator, holds 719 billion cubic feet of gas reserves, of which 62 percent or 447 bcf can be recovered.
Besides gas, the discovery also holds a small amount of oil - about 11 million barrels.
Sources said RIL has proposed a capex of USD 1.452 billion in development of the find and another USD 267 million of exploration expenditure.
DGH, however, believes the finds hold 622.3 bcf of inplace resources, of which 378.56 bcf can be produced.
The block CY-DWN-2001/2 is situated in the Cauvery basin, which is located on the eastern flank of peninsular India, in Tamil Nadu, along the Palk strait and Coromandal coast.
RIL had drilled the discovery well D-35 in July 2007 and a subsequent well to appraise the find in September 2009. Three other wells on the block were dry. The block was won by RIL in the third round of New Exploration Licensing Policy (NELP).