Reliance Industries [Get Quote] is likely to restart crude oil production from its Eastern Offshore KG-D6 block by the month-end, while natural gas will start flowing next month, oil regulator DGH said on Monday.

Reliance, which had started crude oil production from the predominantly gas-rich KG-D6 block in September 2008, had on December 9 shut the oil field following equipment failure.

"In our assessment, crude oil productions should start in next 15-20 days. You can say it will start flowing by month end," DGH director general V K Sibal told reporters on sidelines of the Petrotech Conference here.

Reliance was producing 10,000 to 12,000 barrels per day when the production was stopped.

"We estimate Reliance will be able to raise the output to 30-40 million standard cubic meters per day within a short time," he said.

Reliance CEO and president of Oil and Gas PMS Prasad, on January 9, had written to the oil ministry stating that gas output from KG-DWN-98/3 or KG D-6 fields in Krishna Godavery basin of the east coast would start by next month-end 'subject to weather and marine conditions'.

Initial output from KG-D6 would be in the range of 15 to 25 million standard cubic meters per day, which would be ramped up to 40 mmscmd in four to five months and to 55 mmscmd before the end of the year.

With the government giving the fertiliser and power sectors the topmost priority for sale of KG-D6 gas, the output would help eliminate power deficit in Andhra Pradesh, Maharasthra and Gujarat. It would also reduce fertiliser subsidy as KG-D6 gas would be priced at $4.20 per million British thermal unit, half the price of alternate feedstocks like naphtha.

However, Reliance may not be able to sell the gas as the Mumbai high court has restrained the company from selling fuel to any company other than Anil Ambani-led Reliance Natural Resources Ltd [Get Quote] and state-run NTPC Ltd [Get Quote].

RNRL by virtue of a family agreement and the state-run firm from an unsigned contract of 2005, claim 40 mmscmd gas from D6 and has taken Reliance to court to get their share.

The official said the government has intervened in the case to get the stay on gas sales lifted so that industries starving for gas get the fuel and arrest the economic slowdown.

The government, which had last month withdrawn affidavits filed in the Mumbai high court on the issue, will now make a written statement in the court.

"Our intervention is limited only to get the stay on gas sales vacated," petroleum secretary R S Pandey had recently stated.

"We were told by our lawyers that by virtue of our affidavits, the other party was seeking to cross-examine the person who signed those and this could have delayed a verdict on the issue. So we withdrew the affidavits and will now make written submission through our lawyers."