RIL gas drill doubt

New Delhi, June 29 (PTI): Reliance Industries may defer the development of R-Series and other satellite gasfields in the eastern offshore KG-D6 block if the price outlook is uncertain, its junior partner Niko Resources of Canada said.

RIL has made 19 oil and gas discoveries in the KG-DWN-98/3 block in the Bay of Bengal and so far only three - Dhirubhai-1 and 3 gas and MA oil and gasfields - have been brought to production. Multi-billion dollar development plans for five other finds, including the significant R-Series, have been approved.

In its annual information form for 2014-15 fiscal filed with Canadian regulatory authorities, Niko, which holds 10 per cent interest in the KG-D6 block, said the development of these discoveries was "dependent on the future economic viability of the required investments".

Bringing the finds to production, called development, was "dependent on the future long-term price outlook for gas sales from these projects and the significant uncertainty in this outlook could mean that the development of these reserves could be deferred", it said.

Additionally, it may result in reductions in the company's reported reserves or future net revenues.

RIL is the operator of the Krishna-Godavari basin's KG-D6 block with 60 per cent interest, while Niko has 10 per cent. BP plc of the UK has the remaining 30 per cent.

Niko said expectations of natural gas prices doubling to $8.4 per million British thermal unit (mBtu) from April 1, 2014, had led to a shift in focus in 2013-14 to developing and appraising the assets in the KG-D6 block.

Reliance Industries Limited (RIL)