RIL makes history with 1st deep-sea oil

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Reliance Industries has created history by flowing oil from the nation's first deep-sea oilfield but gas production from the eastern offshore KG basin will begin in January, four months behind the deadline.

Reliance began oil production from its predominantlyg as-rich KG-DWN-98/3 or D6 block on September 17 with initial oil flowing at the rate of 5,500 barrels per day, the company Chairman Mukesh Ambani announced today in Mumbai.

Crude oil production will reach 20,000 barrels per day (1 million tonnes a year) in a month's time and the peak output of 40,000 barrels (2 million tonnes) of oil will be achieved in the first quarter of 2010.

Company CEO and President Oil & Gas P M S Prasad said Reliance had internally set 2008 as the target for oil and gas production from D6 but officially it had always stated that gas production will begin in second half of 2008-09 .

Reliance is selling the first oil from D6 to HPCL's Vizag refinery on spot basis and will look for long-term contract when the production stabilises when it reaches peak.

The first cargo of oil would go to Hindustan Petroleum's Vizag refinery and the crude was benchmarked on Papis and Nigeria bonny light, an RIL official said.