Catching a big fish in the Ocean called…LIFE!

Reliance Industries (RIL), which is set to kick off the first spot crude oil market in the country, will be inviting price quotes from oil refining companies shortly.

This would also set the first benchmark for market-driven prices in the crude oil sector. RIL is set to be the first oil and gas private major to develop an oil and gas market in the country. RIL has had initial round of talks with refinery companies such as Hindustan Petroleum Corp for its Vizag refinery, Mangalore Refinery & Petrochemicals and Chennai Petroleum Corp, to name a few.

RIL would float the tender in a few days when the company would set an indicative benchmarked price based on the quality of the crude. Initial tests have shown the crude to be sweet and light in nature, which is a premium crude. Refinery companies bidding for the crude oil will have to quote a price that is a discount or a premium to the indicative price. Although a final decision is yet to be taken, RIL — which has two refineries, including the one being developed by Reliance Petroleum — will not bid for the crude. “This is aimed at keeping the price discovery process as fair and transparent as possible,” a source said.

MA field Development :

The company, which bagged several blocks under the bidding rounds of the new exploration and licensing policy (Nelp), made the biggest gas find in 2002. The company is planning to produce 40,000 barrels of oil from the MA field, which is a part of RIL’s D6 block.

It is learnt that RIL recently submitted commercial details of MA’s crude to the petroleum ministry. Oil ministry had asked the operator to submit crude lifting procedure and crude sales agreement between the contractor and buyers. According to the production-signing contract (PSC), RIL is expected to submit the same six months prior to commencement of production from the field,” the source said.

The government has approved $2.2-billion field development plan (FDP) of the MA field, an oil ministry official said. “The management committee constituted under the PSC, consisting of contractors (RIL-Niko) and government nominees, had approved the FDP of MA field (Dhirubhai-26) within the contract area of KG-DWN-98/3 (KG-D6) located in the deep waters of Krishna-Godavari (KG) basin off the east coast of Andhra Pradesh in April 2008,” an RIL source said.

According to RIL sources, in the Cretaceous section of D6 Block, the MA-2 well encountered the thickest hydrocarbon column discovered to date in D6. MA-2 reached a depth of 3,581 m and penetrated a gross hydrocarbon column of 194 m consisting of 170 m of gas/condensate (53º API) and 24 m of oil (42-43º API). MA-2 is located 2 km from the MA-1 discovery well. Fast-track development of KG-D6 MA Cretaceous oil discovery has been planned for production to be onstream during 2008. The commerciality of MA oil discovery was approved by the directorate general of hydrocarbons (DGH) on February 1, 2007. 
The field was discovered by RIL in 2006 and a development plan was submitted to DGH and other management committee members for approval. The development plan includes production through a floating production storage & offloading (FPSO) platform (see also : FPSO on MA Field ) The field’s peak oil production is estimated at 40,000 BOPD and an estimated gas of 240-350 MMSCFD.

“The production is likely to commence in the second half of 2008, and this will be the first deep-water production by a domestic company. The MA oilfield development plan is in addition to the development plan for gasfields D1-D3 within the same block,” RIL claimed in a statement.

RIL acquired the block KG-DWN-98/3 under Nelp-I. Niko (Neco) holds 10% participating interest in the block.

 Source : Economics Times, DGH, Media Reports