RIL plans development wells in KG basin in '06

Reliance Industries Ltd (RIL) is likely to start drilling development wells in the Krishna-Godavari (KG) basin in January-April next year, an official of directorate general of hydrocarbon said last week. Commercial output is likely to begin by end 2007, he said.

The directorate had in October-end approved the $2.49-billion development plan for the Krishna-Godavari block, off the east coast.

"The weather window for the east coast opens in January-April. We think it is during that time that Reliance will drill development well," the official said.

In its development plan, Reliance maintains commercial gas output from the block will start in August 2007. "But it could be delayed by another six months. We normally keep a margin of six months," the DGH official said.

DGH has approved the development plan of Reliance for drilling of 35 wells in deep-sea block KG-DWN-98/3. "The development plan has been approved based on our estimation of 5-6 trillion cubic feet of proven gas reserves," he said.

Reliance has so far drilled 14 exploratory wells in the Krishna-Godavari basin off Andhra Pradesh coast""of which only the first three""at Dhirubhai 1, 2 and 3""have been declared commercial.

"However, all the wells have resulted in 100 per cent success," the official said. Reliance expects to produce 40 million standard cubic metres gas per day from Dhirubhai 1 and Dhirubhai 3 fields by the end of 2007 or early 2008.

Reliance holds 90 per cent stake in the gas block, while Niko Resources of Canada owns the remaining 10 per cent.