Out of the total of 41 successes in NELP block, only 3 blocks (D1, D3 and D26) are producing, 6 wells (NEC-25) are commercially approved while remaining are either awaiting approval or under review.
RIL has a number of attractive blocks like KG-DWN-2003/1(KG-D3), NEC-OSN- 97/2(NEC-25) and possible upside in KG-D6 – each of these are expected to be large.
The existing blocks:
1) KG – DWN – 98/3 (KG-D6).
2) NEC-OSN-97/2 (NEC-25).
3) KG-DWN-2003/1 (KG D3).
4) CY-DWN-2001/2 (CY-III-D5).
5) KG-OSN-2001/1 and KG-OSN-2001/2.
6) Panna-Mukta-Tapti (PMT).
7) CBM Blocks
8) Other Blocks
1) KG-DWN-98/3 (KG-D6):
KG-D6 located in the Krishna-Godavari basin was awarded to the consortium of RIL (90%) and NIKO (10%) in June 2000 during NELP I round of bidding. Till date, operator has reported 18 gas and 1 oil discovery in the block. The block started production last year and is currently producing c.63- 64mmscmd of gas. As per the addendum to Initial Development Plan (IDP) approved in Dec’08, the plateau production rate to be achieved from D1 and D3 wells is 80mmscmd.
RIL has a number of attractive blocks like KG-DWN-2003/1(KG-D3), NEC-OSN- 97/2(NEC-25) and possible upside in KG-D6 – each of these are expected to be large.
The existing blocks:
1) KG – DWN – 98/3 (KG-D6).
2) NEC-OSN-97/2 (NEC-25).
3) KG-DWN-2003/1 (KG D3).
4) CY-DWN-2001/2 (CY-III-D5).
5) KG-OSN-2001/1 and KG-OSN-2001/2.
6) Panna-Mukta-Tapti (PMT).
7) CBM Blocks
8) Other Blocks
1) KG-DWN-98/3 (KG-D6):
KG-D6 located in the Krishna-Godavari basin was awarded to the consortium of RIL (90%) and NIKO (10%) in June 2000 during NELP I round of bidding. Till date, operator has reported 18 gas and 1 oil discovery in the block. The block started production last year and is currently producing c.63- 64mmscmd of gas. As per the addendum to Initial Development Plan (IDP) approved in Dec’08, the plateau production rate to be achieved from D1 and D3 wells is 80mmscmd.
2) NEC-OSN-97/2 (NEC-25):
The block was awarded to the consortium of RIL (90%) and NIKO (10%) with RIL as operator in NELP I round of bidding and is located in the North East Coast (NEC) offshore Orissa. Consortium has reported eight discoveries, among which, commerciality is approved for six blocks (D-9, D-10, D-11, D-15, D-20 and D-21).
The block was awarded to the consortium of RIL (90%) and NIKO (10%) with RIL as operator in NELP I round of bidding and is located in the North East Coast (NEC) offshore Orissa. Consortium has reported eight discoveries, among which, commerciality is approved for six blocks (D-9, D-10, D-11, D-15, D-20 and D-21).
3) KG-DWN-2003/1 (KG D3):
Another highly prospective block in the Krishna-Godavari basin is the KG-D3 block awarded during NELP V. RIL aggressively bid for this block with a MWP of total of 14 exploratory wells, with 6 in Phase I, 4 in Phase II and another 4 in Phase III. Hardy Oil (10% partner in the consortium), based on GCA report, has pegged the Best case OGIP reserve at 3.9TCF for D-39 and D-41. Since then, in December 2009, RIL notified third gas discovery (D-44).
4) CY-DWN-2001/2 (CY-III-D5):
RIL has 100% interest in this block in Cauvery basin awarded during NELP III round of bidding. The company had stuck oil in the first well drilled but had to abandon the second well due to technical snag. The third well was dry. In the fourth well, drilled in July’09, an increase in the thickness of pay zone is estimated.
5) KG-OSN-2001/1 and KG-OSN-2001/2:
The block awarded in NELP III, encountered 3 gas discoveries in KG-OSN-2001/1 (D-28, D-37 and D-38) and 2 oil/gas in KG-OSN-2001/1. On expiry of Phase I in June’08, the operator opted not to enter Exploration Phase-II and to carry out appraisal work only. The ‘Declaration of Commerciality’ (DOC) was not submitted within the stipulated time by Nov’09. Further, RIL submitted for extension of appraisal period till Apr’10. DGH recommended for relinquishment of block with immediate effect, as there is no provision in PSC for extension of appraisal phase.
6) Panna-Mukta-Tapti (PMT):
RIL has 30% interest Panna-Mukta (PM) and Tapti blocks of pre-NELP regime operated by British Gas (BG). Exhibit 37 indicates production profile from the PM and Tapti block. Earning from these blocks are going to be stable because; 1) there is no unrecovered cost as the block has been in production for close to 15 years and 2) While some capex was incurred to increase the output from these fields about 5-6 years back, the investment multiple is likely to remain stable.
(7) CBM Blocks:
RIL holds 5 CBM blocks awarded as mentioned in Annexure 18. In our base case we have only assumed Sohagpur West and Sohagpur East (both CBM Phase I blocks) with risk weight of 50% in our valuation. These blocks are provided with 7 year tax holiday under section 80IB. RIL’s EV/boe is $12boe and EV of Rs126bn.
(8) Other Blocks:
CB-ONN-2003/1 (4 Oil Discovery), GS-OSN-2000/1 (1 Gas Discovery), KG-DWN- 98/1 (1 Oil Discovery) and SR-OS-94/1 (1 Gas Discovery) are other blocks with discoveries. Since the commerciality of these blocks is not established, we are not ascribing any value to these blocks in our base case valuation. Over and above, Hardy Oil, as per estimates of GCA, has indicated Best Case gas and oil reserve of 5.2TCF and 180mmboe respectively in KG-DWN-2001/1 block (KG-D9), but in absence of any well discovery
Another highly prospective block in the Krishna-Godavari basin is the KG-D3 block awarded during NELP V. RIL aggressively bid for this block with a MWP of total of 14 exploratory wells, with 6 in Phase I, 4 in Phase II and another 4 in Phase III. Hardy Oil (10% partner in the consortium), based on GCA report, has pegged the Best case OGIP reserve at 3.9TCF for D-39 and D-41. Since then, in December 2009, RIL notified third gas discovery (D-44).
4) CY-DWN-2001/2 (CY-III-D5):
RIL has 100% interest in this block in Cauvery basin awarded during NELP III round of bidding. The company had stuck oil in the first well drilled but had to abandon the second well due to technical snag. The third well was dry. In the fourth well, drilled in July’09, an increase in the thickness of pay zone is estimated.
5) KG-OSN-2001/1 and KG-OSN-2001/2:
The block awarded in NELP III, encountered 3 gas discoveries in KG-OSN-2001/1 (D-28, D-37 and D-38) and 2 oil/gas in KG-OSN-2001/1. On expiry of Phase I in June’08, the operator opted not to enter Exploration Phase-II and to carry out appraisal work only. The ‘Declaration of Commerciality’ (DOC) was not submitted within the stipulated time by Nov’09. Further, RIL submitted for extension of appraisal period till Apr’10. DGH recommended for relinquishment of block with immediate effect, as there is no provision in PSC for extension of appraisal phase.
6) Panna-Mukta-Tapti (PMT):
RIL has 30% interest Panna-Mukta (PM) and Tapti blocks of pre-NELP regime operated by British Gas (BG). Exhibit 37 indicates production profile from the PM and Tapti block. Earning from these blocks are going to be stable because; 1) there is no unrecovered cost as the block has been in production for close to 15 years and 2) While some capex was incurred to increase the output from these fields about 5-6 years back, the investment multiple is likely to remain stable.
(7) CBM Blocks:
RIL holds 5 CBM blocks awarded as mentioned in Annexure 18. In our base case we have only assumed Sohagpur West and Sohagpur East (both CBM Phase I blocks) with risk weight of 50% in our valuation. These blocks are provided with 7 year tax holiday under section 80IB. RIL’s EV/boe is $12boe and EV of Rs126bn.
(8) Other Blocks:
CB-ONN-2003/1 (4 Oil Discovery), GS-OSN-2000/1 (1 Gas Discovery), KG-DWN- 98/1 (1 Oil Discovery) and SR-OS-94/1 (1 Gas Discovery) are other blocks with discoveries. Since the commerciality of these blocks is not established, we are not ascribing any value to these blocks in our base case valuation. Over and above, Hardy Oil, as per estimates of GCA, has indicated Best Case gas and oil reserve of 5.2TCF and 180mmboe respectively in KG-DWN-2001/1 block (KG-D9), but in absence of any well discovery
Source: RIL.com
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