Reliance Gets Approval to Drill 8 Exploration Wells Off India's Tamil Nadu

India's conglomerate Reliance Industries Ltd. (RIL) received government approval to drill 8 exploratory wells in Block DY-III-D5 located offshore the southern state of Tamil Nadu, with the project expected to cost $118.84 million (INR 8 billion), according to a report Monday by local daily The Economic Times.

Reliance, which holds rights to explore for hydrocarbons in the offshore block under India's New Exploration Licensing Policy-III, has been granted the environment clearance to drill 11 prospects in the block.

So far, the company has discovered hydrocarbons in 3 of the 9 wells drilled in the block. The plan to drill the 8 exploration wells is intended to establish the reservoir capacity after seismic data and the earlier drilling campaign highlighted the presence of hydrocarbons in the block.

"Based on the recommendation of the Expert Appraisal Committee (EAC), the Environment Ministry on June 30 gave environment clearance for the RIL's exploratory drilling project in Tamil Nadu (subject to the meeting of certain environmental conditions)," a senior government official said, as cited in The Economic Times.

The company has to ensure that gas produced during the drilling is flared with appropriate flaring booms and to make sure that there is no impact on flora and fauna caused by the drilling of the offshore wells, while taking conservation measures to protect the marine animals/biota in the region.

Reliance is also required to monitor the petroleum and heavy metals concentration in the marine fish species regularly and submit report to the government. The government further suggested that all hazardous waste generated by the rig and other offshore facilities involved in the drilling should be properly treated, transported to shore and disposed of in accordance with the norms.

Reliance entered into upstream exploration and production (E&P) business by taking a 30 percent interest in an unincorporated joint venture with British Gas and state-owned Oil and Natural Gas Corp. Ltd. (ONGC) in the Panna Mukta and Mid and South Tapti blocks.
 
In addition to the Panna Mukta and Tapti (PMT) blocks, the company's domestic portfolio comprises 5 conventional oil and gas blocks in Krishna Godavari, Mahanadi, Cauvery Palar, Gujarat Saurashtra & Cambay Basin and 2 coal bed methane (CBM) blocks in Sohagpur East and West in Madhya Pradesh.
 
The company is also active in overseas upstream market, acquiring 2 offshore blocks (M17 and M18) located in neighboring Myanmar's Tanintharyi basin under the Myanmar Offshore Block Bidding Round 2013. Reliance also entered into three shale gas joint ventures in the Marcellus and Eagle Ford plays in the U.S. in 2010.
 
Energy demand in India has been rising, reaching 700.5 million tons of oil equivalent (MMtoe) last year, 36 percent more than 515.2 MMtoe in 2008, according to figures released recently by BP Statistical Review of World Energy 2016.

Chee Yew has covered the upstream and downstream sectors of the oil and gas industry in Asia for more than 15 years. Email Chee Yew at cheeyew.cheang@rigzone.com

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