Mukesh Ambani head of Reliance Industries limited declared that they have commenced crude oil extraction from India’s Krishna-Godavari D6 Basin since last week. The current output is pegged at 8,000 barrels per day, and is likely to be augmented to 550,000 barrels by second quarter of 2010. Holding the trophy of sludge of crude oil which his company has sucked out from deep sea, he claimed, in couple of year’s time Reliance would meet 40% of India’s energy needs. His announcement has come close on heels to Petroleum Minister Ram Naik’s crude oil reserves status, where the report states India has about 714 mmt which is expected to feed the country another 20 – 25 years.
India’s New Exploration Licensing Policy (NELP) since 1998 to facilitate private sector participation in Oil and Gas exploration is thus providing rich dividends to the energy needs of the country. More than 170 oil blocks have been awarded since 1999 under the NELP, and another 60 blocks is likely to be sanctioned by the end of this year. Recent discoveries of oil fields by Cairn Energy, Oil and Natural Gas Corporation, Reliance, etc. are clear indicators to that India is home to unexplored oil and gas reserves.
Estimates show that the value of oil and gas from D6 block in the Bay of Bengal region is about $20 billion per annum. Natural gas that would come out of D6 would suffice to generate about 25,000MW of power, Ambani said. He further added he was proud to present the company’s stupendous achievement of crude oil extraction in record time of 27 months, by taking into consideration the cyclone prone region where D6 is situated.
India being world’s fifth largest energy consumer, the Reliance’s technological feat in oil production is a very encouraging development for the country. Similar positive reports are awaited from other oil exploration companies by end of this year, as per industry observers. New revelations from state-run as well as other private players in the oil industry are expected to save significant portion of the $70 billion oil imports per annum.
India ranks very low in oil production, and is unlikely to cause any ripple in oil demand. But according to P.M.S. Prasad, Manager and Chief Executive Officer of Reliance there are several unexplored oil pockets where considerable output is expected and this is just a beginning. However, he did not give any details about the exact unexplored areas. Reliance currently controls 40 exploration blocks in the country.