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RIL to soon get approval for Cauvery basin’s capex plan

06 May 2013 Evaluate

Mukesh Ambani owned Reliance Industries (RIL) could soon get approval for $1.45 billion investment for developing a natural gas find it made in a Cauvery basin block off the Tamil Nadu coast. Besides, RIL has also proposed to commit another $267 million of exploration expenditure.

Back in 2007, the company had made the only discovery in the CY-DWN-2001/2 block, while it submitted a Declaration of Commerciality (DoC) for the find, named as D-35 in March 2010 after it carried out drilling of an appraisal well. The discovery holds 719 billion cubic feet of gas reserves, of which 62% or 447 bcf can be recovered. Besides gas, the discovery also holds a small amount of oil.

However, only after several requests to consider the DoC, the DGH on April 15 wrote to Oil Ministry that the Management Committee should be convened to review the DoC for D-35. DGH, for a long has held back its approval as it found the find to be unviable at $4.2 per million British thermal unit gas price. Further, DGH had in its analysis stated that the gas discovery was viable at no less than $6 per mmBtu.

Reliance Industries Share Price

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Company Name CMP
Reliance Industries 1435.70
Indian Oil Corp. 144.70
BPCL 302.85
HPCL 387.00
MRPL 167.90
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