RIL gas output from eastern offshore fields set to increase

New Delhi: After experiencing a decline, Reliance Industries (RIL) (the flagship company of the Mukesh Ambani-led Reliance Group) is likely to regain 60 million standard cubic meters per day (mmscmd) of natural gas output from its eastern offshore KG-D6 fields by April, reports PTI quoting oil regulator DGH (Directorate General of Hydrocarbons).

Reliance has seen its natural gas output fall to 50-52 mmscmd during recent times from over 60 mmscmd achieved in mid-2010 due to reservoir complexities.

"They (Reliance) are producing natural gas from 18 wells currently. Two more wells have been drilled (but have not put on production) and another two are expected to be done by March.

"Once all 22 wells come onstream sometime in April 2011, gas output will again touch 60 mmscmd," Directorate General of Hydrocarbons (DGH) director general SK Srivastava said here.

The Dhirubhai-1 and 3 fields, known as D1 and D3, in the Krishna Godavari basin have seen output fall from 53-54 mmscmd achieved in mid-2010 to 42-44 mmscmd in the week ending 26th December.

Besides D1 and D3, D-26 or MA oilfield in the same block, is producing about 8 mmscmd as associated gas. Together, the output from KG-D6 currently stands at 50-52 mmscmd.

Mr Srivastava said there was nothing alarming about the fall in output as "wells behave differently at different times", producing different volumes of gas at different times.

"Reliance has a commitment to drill 22 wells in the first phase of development (of D1 and D3 fields) by March-April 2011 and we will ensure they meet the commitment," he said.

D1 and D3 are the largest among the 20 oil and gas finds that Reliance and its Canadian partner Niko Resources have made in the Krishna Godavari basin KG-DWN-98/3 or KG-D6 block off the Andhra coast.

"The reservoir is a complex one," he said.

Reliance has been forced to restrict production from the MA field to 18,200 barrels per day due to high water and gas output, sources said, adding the field was yielding more water than oil and that even 8 mmscmd of gas in comparison to 20,000 bpd of oil was considered quite high.

KG-D6 block had in mid-2010 hit a peak of 60 mmscmd after which the output has fallen, sources said.

Sources said Reliance will have to drill more wells to boost output to the approved peak of 80 mmscmd.

Currently, 18 wells on D1 and D3 have been completed and hooked to production system but only 16-17 are producing.

The company is currently selling 14 mmscmd of gas produced from KG-D6 to fertiliser plants, 26 mmscmd to power plants and remaining 12 mmscmd to other sectors like sponge iron plants, LPG, city gas distribution (CGD), petrochemical plants and refineries.

RIL had previously stated that it is carrying out further optimisation exercises at the MA oilfield in view of increasing water production levels. The field has five oil producing wells and one gas injection-cum-gas producer well.

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PM reviews price rise situation with senior ministers

New Delhi: As the government grapples with high prices of essential commodities, prime minister Manmohan Singh today held a meeting with senior ministers to find ways to tame food inflation which has crossed 18%, reports PTI.

The meeting, which was attended by finance minister Pranab Mukherjee, home minister P Chidambaram, food and agriculture minister Sharad Pawar and Planning Commission deputy chairman Montek Singh Ahluwalia, remained inconclusive.

"Another round of discussion may be held tomorrow," a source said.

Food inflation rose to 18.32% for the week ended 25th December, due to rise in prices of food items like onion, milk and meat.

Retail price of onion continues to rule high at Rs55-Rs60 per kg in major parts of the country due to sluggish supply.

Food inflation has been fuelled by high prices of vegetables, fruits, meat, eggs and milk.

Onion has remained in headlines since prices could decline only marginally despite the government announcing three weeks ago that it was taking several measures to increase supply, including through import.

However, Mr Pawar said yesterday that there was not much the government could do in regard to vegetable prices.

"...vegetable prices are high and on that we do not have any control," he said, hoping that prices would come down "eventually".

Even arrivals of new onion crop could not make much impact on its prices, which remained at Rs55-Rs60 at the retail level.

Measures like income tax raids on traders, slashing import duty on onion and tight monetary policy by the Reserve Bank of India have not helped ease the situation.

To some extent, a global spike in commodity prices, are also being blamed for inflation which has become a main concern for the government.

On the import front, there seems to be no immediate hopes of Pakistan resuming onion exports to India with its local traders deciding to sell the contracted 3,000 tonnes of the vegetable into their local market.

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Edelweiss Tokio Life Insurance gets initial approval from IRDA

Mumbai: Edelweiss Tokio Life Insurance Company, a joint venture between Edelweiss Capital and Tokio Marine, today said it has received the initial R1 approval from the Insurance Regulatory & Development Authority (IRDA), reports PTI.

R1 is the first step of regulatory clearances required for carrying on the business as a life insurance company in India.

"Life insurance premiums are likely to increase from the present level of Rs2 lakh crore to about Rs10 lakh crore in the next decade. We are excited by this opportunity and are confident of bringing a differentiated offering leveraging product development capabilities, understanding of Indian consumer needs and our partners' global experience," Edelweiss Tokio Life Insurance director Deepak Mittal said in a statement.

Tokio Marine is one of the world's largest insurance groups headquartered in Japan. With over 130 years of experience in the insurance sector it has expanded its reach across geographies in life and non-life insurance sectors.

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