Reliance says may change exploration strategy
Gadimoga: Reliance Industries Ltd may change its exploration strategy, turning its focus to its foreign assets and reduce risk in India by spreading drilling work over a number of blocks, its executive director said on Saturday.
For last few years, Reliance`s exploration work and most of its resources centred around India`s massive deep sea fields in D6 block, off the eastern cost, where it began pumping gas from April, which at full throttle will nearly double India`s gas output.
"Now that we are off this project (D6) so we have to focus our efforts on other areas ... We may change our strategy to drive it in a different direction," P.M.S. Prasad told reporters.
He said in the next six months Reliance will drill wells at blocks in Oman, Kurdistan and East Timor.
The success of D6 established Reliance, also the owner of the world`s biggest oil refining complex, as a deepwater player and now it is keen to buy acreages in the Gulf of Mexico and Brazil.
Reliance is looking at selling a stake in 6 of its 14 overseas blocks. Prasad said many global firms have shown interest in buying stake in blocks in Oman, Kurdistan and South America.
Reliance holds a 90 percent stake in the D6 block while Canadian firm Niko Resources owns the rest.
Reliance Industries, controlled by billionaire Mukesh Ambani, and Reliance Natural, headed by estranged younger brother Anil, have been contesting details in a supply contract agreed when the Reliance empire split in 2005.
It is currently producing about 60 percent of its 60 million standard cubic metres a (mmscmd) capacity, leading to deferment of its USD 100 million monthly revenue from May and delayed peak gas output of 80 mmscmd by at least a quarter to April, Prasad said.
The government has select customers only for 40 mmscmd. "We hadn`t expected we`d be held up from producing," he said.
Reliance can only sell gas to government-appointed users at a base price of USD 4.2 per million British thermal unit.
Also the government has withdrawn seven year tax incentives, promised at the time of the block was awarded in 2000.
"This is not the environment that we had anticipated. The interpretation of the regime is not as that was (when block was awarded) ... We want to spread our risk, we spend too much capital and time into one asset," Prasad said.
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