RIL rebuts DGH’s KG-D6 report, pins hopes on BP to fix problem

Reliance was "deeply concerned and surprised" "by the reservoir behaviour and "its deviation from what was envisaged in the Field Development Plan (laid out in 2006)," Reliance senior vice-president (commercial) B Ganguly said in an 30th April letter to the DGH

New Delhi: Reliance Industries (RIL) has countered a report that the oil regulator, the Directorate General of Hydrocarbons (DGH), used to target it for falling gas production from the KG-D6 fields, saying the study was done without visiting the fields and the company was not given an opportunity to present its views, reports PTI.

Reliance was "deeply concerned and surprised" "by the reservoir behaviour and "its deviation from what was envisaged in the Field Development Plan (laid out in 2006)," Reliance senior vice-president (commercial) B Ganguly said in an 30th April letter to the DGH.

"Our concern is also evident from the fact that we have moved to bring in a more experienced partner in the form of (UK's) BP, who brings with it the best deep-water experience globally," he wrote, adding that Reliance plans to discuss the reservoir performance with BP to find a solution to the problem.

The DGH had commissioned independent consultant P Gopalkrishnan to give a report on the reasons for gas output from the Dhirubhai-1 and 3 fields in the KG-D6 block falling to 42 million metric standard cubic metres per day (mmscmd) from 53-54 mmscmd in March 2010, instead of rising to the projected 61.88 mmscmd.

In his letter, Mr Ganguly gave a point-by-point rebuttal of Mr Gopalkrishnan's finding that the "shortfall of gas production is due to non-drilling of the adequate number of wells."

"While the DGH-appointed consultant has reached certain conclusions on the performance of the D-1 and D-3 fields, we as operators were neither approached nor afforded an opportunity to discuss any of the field issues with the consultant," he wrote.

"The consultant had not even visited the field to apprise himself of the actual conditions and field performance," he said. "The conclusions are further contrary to the facts and information provided by us from time-to-time to the DGH."

The DGH is using this report to make Reliance carry out the impossible task of drilling two wells by next month and another nine by the fiscal-end. This despite the fact that each well takes up to six months to be completed and there was a very small weather window available for drilling in the Bay of Bengal.

The regulator is mulling over the action it can take against Reliance for failing to meet this commitment, sources said.

Mr Ganguly stated that Reliance neither had access to the consultant nor was the full report prepared by Mr Gopalkrishnan ever provided to the company.

"From the conclusions that have been conveyed to us, it seems that the consultant either has not been provided or has not considered all reservoir/production data or it would not have been difficult for him to appreciate some very obvious reservoir pressure trends in the field that contradict the conclusions reached by the consultant," he wrote.

Mr Ganguly stated that Reliance, BP and its existing 10% partner Niko Resources of Canada will "discuss the reservoir performance in detail and come up with most optimal solutions."

"These solutions would include identification of well locations and interventions in the existing wells," he said.

The Dhirubhai-1 and 3 fields in the eastern offshore KG-D6 block are producing 41-42 million standard cubic metres per day of gas, as against to the planned output of 61.88 mmscmd, due to a fall in reservoir pressure and water ingress in wells.

At a meeting of the management committee (MC) of the KG-D6 block on 2nd May, Reliance pleaded for putting in place a technical committee comprising global experts to advice on the best way forward on the issues facing the fields.

The DGH and oil ministry choose to ignore Reliance's call and 'advised' Reliance to drill two wells and complete a similar number of wells drilled previously by the first quarter of 2011-12 fiscal (June-end).

Also, they wanted another nine wells to go onstream before the end of the fiscal in March 2012.

The DGH representative, according to the minutes of the meeting, remarked that any additional well will take three years from the date of approval for the well location by the MC and, therefore, the additional production from these wells is unlikely to commence before 2014.

Sources said Reliance suggested at the meeting that instead of additional wells, those wells showing an increasing trend in water production could be considered for work-over jobs.

The firm said it has already planned work-over jobs in six wells.

At the meeting, Niko rejected the DGH's suggestion to drill wells outside the main reservoir channel as economically unjustified.

Reliance-Niko, the source said, explained that they have complied with field development plan (FDP) in all respects except for the drilling of a few wells.

They also provided the technical reasons related to the reservoir complexities, with reservoir behaviour being different from what was envisaged/considered at the time of the 2006 FDP, leading to delayed drilling of wells provided for in the FDP.

The DGH representative, according to the minutes, remarked that Reliance has drilled wells in the main channel area where 40% of the reserves are present and additional wells will have to be drilled in the remaining 60% of the outside channel area.

Reliance explained that all the existing 18 production wells are in the main channel area, as envisaged in the FDP.


Black money worth Rs30,000 crore recovered by CBDT

CBDT chairman Sudhir Chandra said the department has gone after big shots and every search or survey has yielded more than Rs100 crore in black money

New Delhi: Taxmen have seized black money to the tune of a whopping Rs30,000 crore in the country in the past two years, said the Central Board of Direct Taxes (CBDT) which is set to get investigative powers to boost its drive against wrong-doers.

The CBDT is in the process of creating a Directorate of Criminal Investigation after getting approval from finance minister Pranab Mukherjee last week, reports PTI.

CBDT chairman Sudhir Chandra said the department have gone after big shots and every search or survey has yielded more than Rs100 crore in black money.

Addressing the 'National Seminar on Black Money', Mr Chandra said, "Through I-T searches and surveys, we have realised around Rs30,000 crore of black money" in the past two years.

"In the last two years, through I-T searches, we have uncovered Rs18,500 crore of black money. That shows we have not gone after small people and we have gone after big people.

"What is the use of mopping the floor if the tap is open? We are trying to close the taps?" he said.

He said his officers did not move out of the office unless they got clinching and conclusive information.

Noting that they used to get a lot of complaints, mainly due to personal vendetta, he said the CBDT was profiling high networth individuals. "Everyone is on our radar," he said.

He said since February, the Income Tax Department has issued 1.15 crore refunds across the country which runs into Rs1.04 lakh crore.

"The income tax refund is your money. In terms of money, it is Rs74,000 crore up to March and another Rs30,000 crore in April and up to 15th May," Mr Chandra said.

He also said the income tax collection has gone up by three times in the first 45 days of this fiscal compared to the same period last fiscal.

"Last year till 15th May, the gross collection of income tax was Rs9,000 crore, this year it is Rs28,000 crore. In 45 days, it has grown up three times," he said.

He added that Income Tax investigation department is being strengthened.

"We are also setting up a new dedicated and computerised exchange of information cell. Whatever information we want from countries, they can send it our cell; will coordinate with identical cells of foreign countries.

"CBDT is also in the process of creating a Directorate of Criminal Investigation. The finance minister has given his approval last week. We need infrastructure to support it," he said.

On the Liechtenstein accounts, he said the information what India got from them cannot even be shared with the Enforcement Directorate.

"Now we are devising some methods to allow non-tax enforcement agencies to access this. India is also considering signing multilateral convention and mutual assistance in tax matters," he said.

Noting that India plays a leading role in improving the coordination and exchange of information on black money, Mr Chandra said the situation has changed with regard to sharing information.

"We have identified tax havens. We have negotiated agreements with 14 countries. Three agreements with Bahamas, Bermuda and Isle of Man are already in place and we are getting information from these countries," he said.

He also said that there was a provision of declaring a country as non-cooperative jurisdiction if it does not share information.

"Once this is done, a company of that country doing business in India or an Indian company doing business with that country, there will be a higher withholding of tax," he said.


Radico Khaitan report net profit of Rs17.4 crore for March quarter

Radico Khaitan registered net sales in Q4 of FY2011 at Rs333.8 crore, against sales of Rs297.7 crore over corresponding quarter in the previous year

Radico Khaitan Ltd, one of the largest liquor companies in the country announced its audited fourth quarter results for the year 2010-11. The company has registered net profit of Rs17.4 crore compared to Rs.9.6 crore in the corresponding quarter of FY2010. The company registered net sales in Q4 of FY2011 at Rs333.8 crore, against sales of Rs297.7 crore over corresponding quarter in the previous year, a growth of 12.1%.

Dr Lalit Khaitan, chairman & managing director, Radico Khaitan said, "Radico Khaitan continues to consolidate its position as one of the leading players in the spirits industry in India. We had a strong performance in FY2011 as a result of our continued focus on the premiumisation of our portfolio. The company has registered net profit of Rs72.8 crore compared to Rs41.5 crore in the previous year of FY2010. The company registered net sales FY2011 at Rs1330.6 crore, against sales of Rs1147.1 crore over corresponding year, thereby showing a growth of 16.0%".  

He further added, "Last year, Magic Moments performed well and achieved volumes of close to 2 million cases and we were delighted to receive the Monde Selection's Grand Gold Award for one of our remix brands. Morpheus premium brandy, which was launched in mid 2009, has not only won Gold at the Monde Selection this year but has also attained leadership position in its category and is growing at a rapid pace. After Dark whisky which was test marketed last year is being rolled out on a nationwide basis this year. We also remain focused on enhancing operational efficiency, productivity and cash flows".

On Wednesday, Radico Khaitan ended 0.57% down at Rs138.35 on the Bombay Stock Exchange, while the benchmark Sensex ended 0.28% down at 18,086.20.


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