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Terror casts shadow on RIL’s KG-D6 work

This article was posted on Dec 10, 2008 and is filed under Market Outlook

The Mumbai terror attacks may derail Reliance Industries’ (RIL) plans to start natural gas production from its eastern offshore D6 field from January 2009, as several ex-pats have refused to return to India citing safety reasons.

The gigantic $5.2 billion project that may almost wipe out the natural gas deficit in the country when Dhirubhai-1 and 3 gas fields located in deep-sea off the Andhra coast begin production next year, had experts from several countries working on it.

But the travel advisories issued by some countries in the aftermath of Mumbai terror attacks last month have seen several of them refusing to return to India to work on the project, company sources said.

Engineers, reservoir specialists, geologists, geophysists and rig operators mostly from Europe and the US were working on the project. As an industry practice, people in offshore sites work continuously for 15 days and then take a break of equal number of days. Some of the specialists who went on the break have refused to return, they said.

To add to Reliance woes, cyclonic conditions in Bay of Bengal last month stopped work on the project for almost two weeks, sources said, adding that the weather has improved and work resumed.

A Petroleum Ministry official, however, said that bad weather would not result in any major delay in production plans. “We had a review yesterday and believe production would start by end-December or January.”

Reliance is to begin production from its prolific D6 fields in January 2009 with an initial output of 5 million standard cubic meters per day. This will rise to 25 mmscmd by March and to 55 mmscmd by July 2009.

source: BusinessStandard

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