High hopes for Reliance block CY-DWN-2001/2

Vol 16, PW 22 (30 May 13) Exploration & Production
     

Lady luck is smiling on Reliance.

As industry buzzes with excitement over the MJ-1 discovery at KG-D6 it looks like Reliance might also soon be back in action at Cauvery basin deepwater block CY-DWN-2001/2 - six years after it announced the D35 gas discovery. PETROWATCH learns the high level Empowered Committee of Secretaries (ECS), led by cabinet secretary Ajit Kumar Seth, is set to approve a Declaration of Commerciality (DoC) for D35 - submitted by Reliance three years ago - when it meets again next month (June).

The first ECS meeting over the DoC on May 21 was inconclusive. Also known as CY-III-D5-A1, the DoC for gas discovery D35 has been gathering dust since 2010.

Why Because in the DoC Reliance said production from the block is viable only if the gas price is $6/mmbtu against the current D6 gas price of $4.2/mmbtu. What has changed since Last December (2012) the Rangarajan panel committee suggested said domestic gas prices should be raised to around $8/mmbtu from April 2014.

"We no longer see any reason to hold up development of CY-DWN-2001/2," says an oil ministry source. "Reliance will take one year to submit a Field Development Plan by when the upward revision of domestic gas prices will be effective.

" On May 2, oil secretary Vivek Rae held a meeting with joint secretary Aramane Giridhar and director exploration Nalin Srivastava and directed them to prepare a favourable note for block CY-DWN-2001/2. Reliance’s DoC says well D35 can produce approximately 4.2m cm/d over 10 years from five wells.