Not all good news for Reliance on eastern offshore

Vol 8, PW 8 (14 Jul 04) Exploration & Production

Indias eastern offshore has been lucky for Reliance.

Last year, the company announced its first hydrocarbon strike in eastern offshore block KG-DWN-98/3 and last month it announced a commercial gas discovery in block NEC-OSN-97/2 - also in the eastern offshore. But not all the blocks in this region are proving so lucky.

Take NELP-I deepwater block KG-DWN-98/1, which lies adjacent to Cairn Energys NELP-I block KG-DWN-98/2. PETROWATCH learns Reliance drilled a dry hole on this block in June.

Yet this has not disheartened Reliance, which asked for and received a six-month extension to Phase-I of the exploration period, in addition to the 10-month extension it received earlier from the oil ministry. During the three-year Phase-I of the exploration phase, Reliance committed to reprocessing 1,000-km old 2D and acquiring, processing and interpreting 3,000-km fresh 2D and 2,000-sq km fresh 3D.

Its actual performance generally matched the committed work programme. Reliance reprocessed 1,015-km old 2D and acquired, processed and interpreted 1,937-km fresh 2D and 1,223-sq km fresh 3D.

The minimum work programme in Phase-I did not provide for drilling an exploration well but Reliance wanted to drill one well and adjusted this against the 1,063-km 2D and 777-sq km 3D deficit in the work actually done. The oil ministry had no objection to this because the 2D and 3D shot by Reliance was, reasonably sufficient to identify and demarcate drillable prospects.

More, we are told that only drilling and no amount of interpretation of seismic data can confirm the presence or absence of hydrocarbons on a block. Also important to the oil ministry was that Reliance would spend about $20m on drilling the well against the $6m it would spend to make good the deficit in actual work done (as against commitment) during Phase-I.