Reliance Industries says that the Oil is a Major Boost for the Indian Countries. Reliance Industries has started pumping natural gas from a massive deep-sea field in the Bay of Bengal off India's eastern coast.
The government has started receiving its share of profit from Reliance Industries (RIL)-operated D-6 block in the Krishna-Godavari (KG) basin. It has booked $218,960 as its first profit share for the quarter ended December 31, 2008, by selling crude oil produced from the block, a petroleum ministry official said. The block started producing natural gas recently. The profit was generated from the sale of crude oil produced from the block beginning mid-September at an average price of $50.80 a barrel, said the official who didn’t wish to be named.
In the quarter ended December 31, 2008, Reliance Industries (RIL) earned $21,896,016 by selling crude from MA oil field in KG-D6 block. As per the contract between the government and RIL, the contractor was entitled to keep 90% of the sum towards recovering huge investments made by it in developing the field. The balance amount was distributed between the contractor (RIL) and the owner (the government) in a mutually-agreed proportion.
The official said that RIL has spent $6.26 billion in developing the KG basin block. The government has approved $8.84-billion expenditure to produce 80 million standard cubic meters per day (mmscmd) of natural gas from the block. This also includes creation of an excess infrastructure capacity for producing 120 mmscmd of natural gas from the field. An email query to RIL in this regard went unanswered.
The directorate general of hydrocarbons — the technical adviser for upstream activities in the petroleum ministry — didn’t confirm or deny the figures. As per a DGH figure, the contractor had spent $4.65 billion for developing oil and gas fields up to March 31, 2008.
According to an estimate by the petroleum ministry, the field is expected to generate a revenue of $42 billion over the life of the field, which is 11 years. The government is expected to earn $14 billion from the D-6 block. “However, the figure is based on assumptions. It is calculated by keeping gas price at $4.20 per million British thermal unit (MBTU) which is dependent on a formula with variables,” the official said.