 NEW DELHI: Reliance Industries has suggested that the government appoint a team of international experts to verify what the company called "motivated and unsubstantiated canards" that it was deliberately producing less gas from its Andhra offshore field to take advantage of higher price later. In a letter to the oil ministry, RIL executive director P M S Prasad said it was impossible for any company to "hoard" gas and the company has scaled down the cost of developing the block by $3 billion from the originally approved $8.8 billion in line with lower reserve and output e stimates. Though the letter does not name Arvind Kejriwal, it challenges the anti-corruption activist's recent allegations of gas hoarding by RIL. "As any person associated with the oil and gas industry will easily vouch that hoarding gas is a technical impossibility. Oil and gas reservoirs are dynamic systems and not inert cold storage facilities. They are both subject to and respond to production rates and flows... Both under-production as well as over-production would be easily noticeable," the letter said. "If there were any genuine technical doubts... there was always the option of appointing a team of internationally reputed technical experts, familiar with depositorial systems (oil and gas reservoirs), to assess reservoir conditions. In fact, we have on several occasions raised the issue of approaching such technic al experts, so that misinformation would be averted," the letter added. On Kejriwal's allegation of gold-plating the capital expenditure plan, the letter said, "On the one hand we are being accused of escalating costs and on the other we are being targeted for not expanding capital in drilling wells to increase production...""If the contractor were really to benefit from escalating costs, we would have gone ahead and drilled all the wells demanded by DGH (ministry's technical arm), entailing an expense of nearly $2 billion. Instead, we have cut down on all infructuous expenditure," the letter said, explaining that the decision against drilling more wells was taken after it became clear that they would not help raise gas production. It said globally, oil and gas fields have been known to be unpredictable and reserve estimates have seen significant variations, since these are "estimates" based on data on hydrocarbons "buried deep in geological frontiers". As a case in point, the letter pointed out that state-run Oil and Natural Gas Corporation and its overseas acquisition arm ONGC Videsh have faced similar surprises in the Neelam field and Siberian assets of Imperial Energy, respectively, where actual production has not matched projections. "Similar examples abound across the world... deep water basins add to the complexity as technologies to assess sub-surface conditions several kilometres (under sea bed) are even less perfect... The D-1 and D-3 field, known for its complexity and harsh working environment, has similarly not performed in the manner that was anticipated in spite of the con tractor's best efforts. RIL has at all times kept the government informed," the letter said.  via Business - Google News | |||
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Sunday 25 November 2012
Let international experts review output: Reliance Industries - Times of India
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