A day after Reliance Industries Ltd announced sale of 30 per cent interest in its 23 oil and gas blocks, Canada-based Niko Resources, RIL's partner in three fields - D6, NEC 25 and D4 - on Tuesday said it has the option to increase its stake in the fields by up to 30 per cent from current working percentages.
Upstream regulator Directorate General of Hydrocarbons has sent notices to Reliance Industries and Niko Resources of Canada, seeking explanation as to how they arrived at the increased figure of 35.4 trillion cubic feet (tcf) of gas reserves.
The government nod to Reliance Industries selling 30 per cent stake in its oil and gas blocks such as eastern offshore KG-D6 to London-based BP Plc for $7.2 billion hinges on no-objection certificate (NOC) from Canada's Niko Resources and UK's Hardy Oil and Gas.
Reliance Industries' flagging KG-D6 gas block holds 80 per cent less reserves than previously estimated, the firm's junior partner Niko Resources of Canada said.
The near-doubling of gas prices to $8 per million British thermal units that will kick in from next month will accrue to all producers in the country.
Reliance Industries Ltd has discovered huge oil reserves in its gas-rich D6 block in Krishna Godavari basin off the east coast, its minority partner Niko Resources of Canada has said.
Sources said the Cabinet had in December last year stipulated that the new gas rate will apply to all producers excepting eastern offshore KG-D6 block where the contractor, which is fighting government against levying penalties for output shortfall, will have to give bank guarantees equivalent to the incremental revenue it would get from the new rates.
The Krishna-Godavari (K-G) basin may prove to be a much bigger play for Reliance Industries Ltd. This follows the announcement that its D4 block could hold twice the reserves of the in-production D6 block to the north.
A market-based gas pricing regime is to kick-in from next month.
Reliance Industries has found natural gas reserves in a well drilled on its NEC-25 block in Mahanadi basin, off the Orissa coast, the company's junior partner Niko Resources of Canada said on Friday.
RIL, which holds 90 per cent interest in KG-D6, paid $2.47 million while Niko Resources of Canada paid USD 274,767 in profit petroleum for the April-June quarter, officials said.
Indian Oil Corporation, the country's largest refiner, has put up a war chest of $2 billion for acquiring a medium-sized foreign oil firm to set up its own exploration and production division.
Reliance Industries has made two more gas discoveries at its prodigious D6 and NEC-25 blocks off the east coast, the company's junior partner Niko Resources of Canada announced.
Reliance Industries Limited has made two natural gas discoveries on the east and west coast adding to the vast hydrocarbon reserves it has found in the past few years.
If proved correct, MJ-1 would the third biggest gas field in KG-D6 after D1&D3.
The government has slapped an additional penalty of $792 million on Reliance Industries for producing less than targeted natural gas from its eastern offshore KG-D6 block.
The KG-D6 fields, which began production in April 2009, hit a peak output of 69.43 mmscmd in March 2010 before water and sand ingress led to more than a third of the wells shutting down.
The Delhi high court (HC) division Bench on Thursday sought a response from Reliance Industries (RIL) and others regarding the government's appeal against the Mukesh Ambani-owned conglomerate and others for fraudulently and unjustly enriching themselves by draining gas from their deposits, amounting to over $1.5 billion. The Centre had appealed against the single-judge Bench order of the Delhi HC on May 9, which had dismissed its petition. Justice Anup Jairam Bhambhani had upheld the international arbitration award of July 24, 2018, in favour of the RIL-led consortium. The consortium includes UK-based BP Plc and Niko Resources of Canada.
The government on Thursday decided to join the arbitration initiated by Reliance Industries and its partners over delay in revision of natural gas prices, and named former Supreme Court judge G S Singhvi as its arbitrator.
The Cabinet Committee on Economic Affairs had first on June 27, 2013, and then on December 19, 2013, decided to price all domestically produced natural gas, including unconventional fuels such as coal-bed methane and shale gas, at an average of international hub rates and the cost of importing liquefied natural gas.
The output was behind target in 2015-16 as well and the government is yet to issue a cost disallowance notice for that
Post-cessation, activities related to the safe shutdown of the field are underway.
Oil Min rejects RIL arbitration notice.
The Election Commission asked the government to defer announcement of the new price till completion of the polls and so RIL was asked to continue selling the gas at old rates.
RIL and its partners BP Plc of UK and Canada's Niko Resources had last month spud the seventh well on the MA oil and gas field in the KG-DWN-98/3 or KG-D6 block in the Krishna Godavari basin.
RIL and its partners BP plc of UK and Canada's Niko Resources have spud the seventh well on the MA oil and gas field in the KG-DWN-98/3 or KG-D6 block in Krishna Godavari basin.
BP, which bought a 30 per cent stake in RIL's 21 oil and gas blocks, including KG-D6, for $7.026 billion in 2011, is working with RIL to arrest the output decline in the fields.
RIL and its partners BP plc of UK and Canada's Niko Resources plan to produce about 13 million standard cubic metres per day of gas for 13 years from D-34 discovery, known as R-Cluster, in the KG-DWN-98/3 or KG-D6 block by 2017-18.
The government had disallowed as much as $1.005 billion of its investment as KG-D6 output lagged targets.
The company will invest $747 mn to increase production from D1, D3 and MA fields.
The move is likely to force the government to take a faster decision.
The withdrawal of the arbitration will now entitle the two companies to marketing and pricing freedom on the natural gas they produce from newer fields in the deep sea at an investment of Rs 40,000 crore by 2022.
RIL may go to arbitration which may lead to further delay in production and extra cost associated with the arbitration.
RIL produced a total of 13.58 mmscmd of gas from Dhirubhai-1 and 3 gas fields and MA oil and gas field in the KG-DWN-98/3 or KG-D6 block in Bay of Bengal in the first week of February, which rose to 13.63 mmscmd in the following week.
The Cabinet on Thursday decided to allow Reliance Industries to almost double the price of natural gas from April provided the firm gave a bank guarantee to cover its liability if gas-hoarding charges are proved.
RIL has more than half a dozen undeveloped discoveries.
Sensex ended up 41 points at 29,136 and Nifty gained 4 pts to 8,809.
RIL has been selling gas from KG-D6 at the same price since it started production in April 2009.
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