Reliance to invest $23 m for work on Cauvery asset

Reliance Industries plans to invest about $22.75 million for work on its discovered deepwater Cauvery asset. The company, in its appraisal programme submitted to the block management panel, has proposed to drill more wells — one each in the ‘firm’ category and the ‘to mature’ segment.

Official sources told Business Line that the management committee of the block CY-DWN-2001/2 (CY-D5) has met already and the final approvals were awaited.

The appraisal programme enables the committee to review the discovery and assess its commerciality. It is prepared and submitted by the contractor within a stipulated time frame, outlining a work programme and a budget to carry out the work in the block.

The programme is submitted to the block management committee.

The management committee comprises nominees of the Directorate General of Hydrocarbons and the Government apart from the contractors’ representative. The proposal envisages RIL drilling a well under the ‘firm category’, involving a cost of about $14.45 million. The firm category is a commitment by the contractor to drill a well for appraisal of the discovery.

Subsequently, based on the results of the ‘firm’ category, the contractor carries out activities under the ‘to mature’ segment by drilling one or two more wells. The company plans to invest $8.3 million to undertake activities in the second category, sources added.

RIL had drilled three wells in the block and struck hydrocarbon in one. Based on the appraisal programme, there are plans to drill more wells in the area once the deepwater rigs are available, sources said. Currently, the company has deployed six rigs in the K–G basin.

In October 2007, RIL had re-entered the asset to carve out the third well, but without much luck. The company has struck hydrocarbon in the first well drilled in the block and had to abandon the second well due to a technical snag.

The find in the first well showed there were two zones. In the first zone, according to the initial tests, RIL has found 550 barrels a day of oil and one million cubic ft a day of gas, while in the second zone it found 31 million cubic ft a day of gas and 1,200 barrels a day of condensate.

The block is 14,325 sq km in size. CY-D5 is a NELP-III block. RIL holds 100 per cent interest in the block.