Reliance Industries, BP discover new gas in Cauvery basin

Moneycontrol Bureau

Reliance Industries and its UK-based partner British Petroleum have announced a new gas condensate discovery off the east coast in the Cauvery basin. The energy giant has notified the government and the Directorate General of Hydrocarbons about the discovery named,  D-56.

Preliminary evaluation of well data and fluid samples indicate presence of gas condensate in the reservoir interval with a gross column of 143 metres. The well reached its total depth and RIL, as an operator has conducted drill stem test to evaluate the potential of the discovery, said the firm in a statement.

This is the second discovery by RIL after BP came on board in February 2011. Both firms with 70 and 30 percent interests had on May 24 announced their first discovery of gas and condensate in the KG-D6 block. RIL had then said that the development of this discovery and production thereafter may take another 18 months.

Meanwhile, though brokerages are yet to comment on what the discovery means for RIL in long term, experts say the discovery should pressurize the government to fasten gas price approval process.

The current price of USD 4.20 per million British thermal unit (mBtu) was fixed by an Empowered Group of Ministers in 2007, to be applicable for a five-year period from the date of commencement of gas supply. Supply began in April 2009. This was through a formula when crude was capped at USD 60/ barrel. This price is applicable till March 31, 2014. RIL has for long been seeking a three-fold raise in KG D6 gas price to be at par with global market.

RIL shares climbed marginally  to Rs 810.54 in early morning trade.

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