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Energy - RIL to account for 40% of India's energy output |
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Reliance Industries will account for about 40 per cent of the country’s energy production in the next 18 to 24 months, putting the company on track to earn a quarter of its profit from oil and gas production, from 5 per cent now.
The total hydrocarbon output from the Dhirubhai 6 (D6) block in the Krishna-Godavari basin, the field that is expected to more than double India's gas output, will rise to 550,000 barrels of oil equivalent a day (boed) by March 2010, RIL Chairman and Managing Director Mukesh Ambani said in his first media meet in five years.
In monetary terms, it’s Rs 86,000 crore a year, Ambani said, adding the D6 block in the KG basin will transform the country’s energy landscape.
Speaking at the sprawling Reliance Corporate Park in Navi Mumbai today, Ambani termed the start of oil production at the D6 basin three days ago as a historic occasion not only for the company but for the entire country. The initial production from the block was 5,000 boed.
“From nowhere in 2002 as far as oil production is concerned, we are now set to be among the top 20 integrated energy companies in the world. In fact, RIL will be one of the world’s largest deep-water oil well developers,” a beaming Ambani said, as his wife Nita Ambani, who was sitting next to him, nodded.
"Around 40 years after Bombay High was discovered, this is India's major victory in the battle for energy security. RIL has managed to produce oil in two years — a time other companies would take just to map out their exploration nitty-gritty," Ambani said, looking appreciatively at his top team led by PMS Prasad, president & CEO (oil & gas).
Ambani is investing $5.2 billion to develop the KG basin. This oil production, Ambani said, will not only benefit customers but also reduce subsidies and thus release huge financial resources that the government can spend on development.
The company will start pumping natural gas from the KG basin in the January-March quarter, which is within the broad target of the company but later than the government's forecast that production would begin by November.
Prasad later explained that the delay in gas production is because of tough weather conditions and a tight supply chain. He said the company will produce 90 cubic metres of saleable gas a day starting in January. The same quantity of gas is being produced today and that's being re-injected into the system.
The gas pipeline connecting the east and west coasts is almost complete, Prasad said. The pipeline connects all existing gas networks of GAIL India and Gujarat State Petronet Ltd. ''Gas will reach customers very quickly, he said.
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