From the Economic Times

Reliance had steadily acquired 16 conventional oil and gas assets, including four in Peru, three in Yemen, and two each in Oman, Kurdistan and Colombia.

NEW DELHI: Reliance Industries has pulled out of the last oil block it held in Peru, trimming its overseas assets to just two properties in Myanmar.

The billionaire Mukesh Ambani-led firm had in 2007 set up Reliance Exploration and Production (REP) DMCC primarily for acquiring overseas assets.

It had steadily acquired 16 conventional oil and gas assets, including four in Peru, three in Yemen (one producing and two exploratory), two each in Oman, Kurdistan and Colombia and one each in East Timor and Australia. It last bagged two oil and gas exploration blocks in Myanmar in 2014.

But the company slowly exited most of its international assets.

In its latest annual report for 2016-17, RIL says it has “withdrawn from Block 39” in Peru. RIL held 10 per cent interest in the block. Anglo-French oil and gas company Perenco held 55 per cent stake in the block while PetroVietnam of Vietnam held the remaining 35 per cent.

RIL said it is awaiting formal assignment of its interest to the existing partners.

The company now is left with just two exploration blocks in Myanmar — M17 and M18. RIL holds 96 per cent stake in each of the two blocks with the remaining 4 per cent being with a local company.

For Block M17, the company has sought an “extension for study period” from Myanma Oil and Gas Enterprise or MOGE, the annual report said.

RIL’s domestic oil and gas business portfolio, which at one point of time comprised of 42 blocks or fields, has shrunk to five conventional oil and gas assets and two coal-bed methane (CBM) blocks.

As part of its upstream (hydrocarbons exploration and production) portfolio rationalisation, the company has been exiting those assets which it feels are not going to give good return on investment.

According to the annual report, the company’s present domestic portfolio comprises the flagging KG-D6 block in the Krishna Godavari basin, Mahanadi basin block of NEC-25, CB-10 in Cambay and GS-01 in Saurashtra basin.

Besides, it also has stake in Panna/Mukta and Tapti oil and gas fields in the Arabian Sea. However, Mid and South Tapti fields have been abandoned after production tapered, it said.

Also, it has two CBM blocks in Madhya Pradesh.

RIL had in February 2011 announced a “transformational” deal when UK’s BP picked up 30 per cent stake in its 23 oil and gas blocks for USD 7.2 billion. However, in August that year the government allowed them to form a partnership in only 21 blocks.

Since 2012, RIL and BP have been pruning their portfolio, shedding not so viable acreage. They are now left with just three blocks — the producing KG-DWN-98/3 or KG-D6 block in Bay of Bengal, gas discovery areas of NEC-OSN-97/2 (NEC-25) and CB-ONN-2003/1 in Cambay basin.

In US, it also has stake in three shale gas producing properties.

Reliance Industries signals end of output from three KG-D6 wells

India’s energy conglomerate Reliance Industries has signaled that its three operational wells at the Krishna-Godavari basin block are close to the end of their production and the company is working on extending its life cycle until a time it can replace it with output from new wells.

Earlier this month, RIL chairman Mukesh Ambani, along with partner BP Plc chief executive officer Bob Dudley, expresses renewed confidence in the policy environment and the regulatory regime and said they would jointly invest $6 billion in new fields discovered earlier in the deep-sea KG basin block.

The company is also upbeat on its fuel retail business and aims to have a pan-India presence by the end of 2017-18 after witnessing a robust growth in sales volumes of diesel due to a discount offered by the company to counter the impact of demonetisation.

“In the near term, RIL’s focus is to maintain wells flowing in its KGD6 block. This involves continuous field management optimisation to sustain well count and manage network. RIL will continue to minimise operating cost without compromising reliability and sustainability of field operations,” the company said in the annual report.

As part of the early monetisation of existing discovered resources in KG-D6 Block, RIL wants to leverage on the deflation in market to optimise capex and hopes to award contracts for development of KGD6 discovery known as R-Cluster, with option to use in development of discoveries known as MJ and Satellite.

“RIL’s focus is to obtain approvals for the development of projects,” the company said. “RIL aims to sustain production until future projects are commissioned, while leveraging current market downturn to achieve lowest cost for future projects.”

The company is scaling up its coal bed methane output as well to make up for the declining output from KG-D6. “I am happy to share that Reliance is on its way to become the largest unconventional natural gas producer in India with the commencement of commercial production from our CBM fields at Sohagpur,” Ambani said. “Gas from CBM fields will be delivered to customers on Indian Gas Grid through our new 302 kilometre long Shahdol-Phulpur pipeline,” he said. In the fuel retail business, the company aims a pan-India presence by the end of the current fiscal by expanding into unrepresented and new markets.

The company operated 1,221 fuel outlets at the end of 2016-17. While its target of having at least 1,500 outlets by March 2017 is delayed and likely to be achieved by December 2017, it has been able to increase sales from existing pumps. “These outlets are registering industry leading pump throughputs which were as high as twice the industry average in March 2017,” Ambani said.


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