RIL's oil find will save India $20bn/yr

Mukesh Ambani’s flagship Reliance Industries Ltd said the total oil and gas produced by it in 18 months’ time would save the country about $20 billion (about Rs 90,000 crore a year—at $100/barrel crude price—by adding 40% of the existing domestic production of hydrocarbons and saving subsidy by providing cheap ingredient for making fertilisers.Formally announcing the first commercial flow of oil from one of its concessions in the Krishna-Godavari basin, Ambani said, “It marks the first production from just one field that is part of a larger discovery domain. We can now confidently look forward to production from a series of other fields. Its impact on the fortunes of India and Reliance will be enormous and will contribute to foreign exchange and import bill savings of $20 billion.’’Ambani said, “Forty years after Bombay High was discovered, this is India’s major victory in the battle for energy security.’’This could also help unlock the subsidy on fertilizers and spend money on social sector projects , he added. Crude was flowing at an initial rate of 5,000 barrels per day and will go up to 5.5 lakh barrels of oil-equivalent in the next 6 quarters.The oil from the acreage was of high quality and was being benchmarked to Bonny Light and Tapis crudes that are considered “sweet’’ and command a premium.Mukesh Ambani said that at the peak of production of oil and gas, the output of 5.5 lakh barrels of oil-equivalent output from Reliance’s Krishna-Godavari acreage would be enough to feed cooking gas to 100 to 120 million households. This will also make it possible to provide natural gas to over 50 million two-wheelers, 5 million cars and 10 million trucks. It will also be possible to “provide distributed power generation’’ to meet the requirement of lighting over 80 million households. Stressing the benefit from the discovery that will flow to rural areas, Ambani said providing gas for making fertilisers at a rate lower than global markets would help the government unlock the subsidy for spending in health, education and other social sector projects.