No luck for Reliance after KG-DWN-98/3

Vol 7, PW 21 (14 Jan 04) Exploration & Production

Reliance hasnt had much exploration success since it announced a massive gas find at KG-DWN-98/3 in the Krishna Godavari last October.

Since then it has drilled a series of dry holes on its other eastern and western offshore exploration blocks. Take the former Tullow block KG-ON/1.

We learn Reliance has relinquished this block even though it lies in the vicinity of KG-DWN-98/3. PETROWATCH has similar news about western offshore block GK-OSJ/1, also a former Tullow concession.

Reliance took over as operator in February 2001 and drilled one commitment well last year. Traces of hydrocarbons were encountered but there was no flow during testing.

The extended Phase-II of the work programme on this block ended in December. Reliance might not go in for Phase-III, says an industry source.

They feel the block is not commercially viable. During Phase-III Reliance is supposed to drill two wells.

Hardly more encouraging is news from two of the three other former Tullow blocks now with Reliance. At Gujarat offshore block GK-OS/5 a thick basalt layer of between 400 metres and 500 metres thickness stands between Reliance and the target zone for locating hydrocarbons.

The minimum work programme commits Reliance to one exploration well. There are now two views over this block, says a source.

One view is that the block should be retained while the other view is that recovery (of hydrocarbons) from this block may not be cost effective and the block should be surrendered after the well is drilled. Reliance is also lukewarm about holding on to GK-ON-90/2 because of the technological difficulties of working on this block which lies neither completely onland nor completely offshore.

Interest is now focused on CB-ON/1 which is believed to be the most prospective of the five Tullow blocks where Reliance farmed-in as operator. Meanwhile, Tullow is still waiting for licencee ONGC to approve the complex financial reorganization of CB-ON/1 and GK-ON-90/2.

Both blocks were originally with Okland International who on paper at least is still operator, as the assignment to Tullow has not yet happened. Only after that can the assignment to Reliance take place.

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