Niko scales down RIL gas find

The Canada-based Niko Resources, which holds a 10 per cent "unrisked equity" in Reliance's D6 deepwater block in the Krishna-Godavari basin off the Andhra Pradesh coast, has informed its shareholders that the estimates of recoverable gas from the site have been lowered.

In a statement to announce its second-quarter financial performance and operational outlook, the company said DeGolyer and MacNaughton had made a calculation error in its March 31, 2003 estimates of the reserves in the D6 Block.

A revised report was issued on November 12 by DeGolyer and MacNaughton, which is a global, independent reservoir certifying agency based in Texas.

"The revised report has estimated gross in-place gas reserves of 8.6 trillion cubic feet, against 9.9 trillion cubic feet reported earlier. Of this, 2.5 trillion cubic feet is proved, 3.4 trillion cubic feet probable and 2.6 trillion cubic feet possible," Niko said.

This is in contrary to Reliance's estimates, which were raised to 14 trillion cubic feet on October 16 from 10.5 trillion cubic feet in the first assessment. Niko's estimates are, therefore, just 60 per cent of those announced by Reliance.

Reacting to Niko's revised estimates, a Reliance spokesperson said, "Reliance confirms its estimate of original gas in-place of 14 trillion cubic feet in the D6 block in the Krishna-Godavari basin. This estimate is based on eight wells drilled in the first phase of exploration, including the volumes in thinly-bedded sands and low amplitude packs. All the wells have not been fully evaluated by DeGolyer and MacNaughton."

However, in its estimates covering all its global interests, Niko has reduced its share in the D6 well. Niko's release states that its unrisked 10 per cent share of recoverable gas is 710 billion cubic feet, against 810 billion cubic feet announced earlier.

New estimate

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Niko Resources holds a 10% unrisked equity in Reliance's D6 deepwater block in the Krishna-Godavari basin

DeGolyer and MacNaughton had made a calculation error in its March 31, 2003, estimates of the reserves

The revised report has estimated gross in-place gas reserves of 8.6 trillion cubic feet (tcf), against 9.9 tcf reported earlier

Reliance stands by its original estimate of 14 tcf