Looks like the RIL led consortium has decided to drop plans for any further exploration related activity in the D-6 block.
8The company had earlier accumulated stocks of equipment in the fond hope of furthering its E&P work, both to sidetrack existing D-6 wells and production work to get its discoveries going.
8But clearly all these plans have been shelved.
8It does not make sense to get into production mode for its discoveries because at the current price of gas, it does not make economic sense.
8Assuming that the price of equipment and services have fallen, breakeven costs will still be higher than the current price or the likely price in the next one year or more.
8According to RIL sources, the current break even price for discoveries is around $7/mmbtu.
8This price is way too high compared to the current gas price.
8A premium on the price was expected for deepwater discoveries from the government but that too has also been kept in cold storage.
8Then again it is not known whether the premium will be available for RIL's discoveries or not as the cut off point for being eligible for the premium excludes these discoveries as of now.
8On top of all this, there is likely to be a demand for around Rs 8000 to Rs 9000 crore for gas that has been taken from the adjacent ONGC block.
8All of this makes the D-6 block a losing proposition for its owners.
For more details visit indianpetroplus.com
8The company had earlier accumulated stocks of equipment in the fond hope of furthering its E&P work, both to sidetrack existing D-6 wells and production work to get its discoveries going.
8But clearly all these plans have been shelved.
8It does not make sense to get into production mode for its discoveries because at the current price of gas, it does not make economic sense.
8Assuming that the price of equipment and services have fallen, breakeven costs will still be higher than the current price or the likely price in the next one year or more.
8According to RIL sources, the current break even price for discoveries is around $7/mmbtu.
8This price is way too high compared to the current gas price.
8A premium on the price was expected for deepwater discoveries from the government but that too has also been kept in cold storage.
8Then again it is not known whether the premium will be available for RIL's discoveries or not as the cut off point for being eligible for the premium excludes these discoveries as of now.
8On top of all this, there is likely to be a demand for around Rs 8000 to Rs 9000 crore for gas that has been taken from the adjacent ONGC block.
8All of this makes the D-6 block a losing proposition for its owners.
For more details visit indianpetroplus.com
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