Mukesh Ambani’s Reliance Industries (RIL) could overtake state-owned Oil and Natural Gas Corporation and Oil India to account for over 40 per cent of the country’s natural gas production in the next three years, say analysts. |
Supply from RIL’s Krishna Godavari basin reserve on the east coast began on April 2. The initial production will be around 14 million standard cubic metres per day (mscmd), which would go to the urea units of fertiliser firms.
If production steps up as anticipated, the present market share of ONGC and OIL will drop from 65 per cent now to around 30 per cent in the next three years. While liquefied natural gas (LNG) imports would come down from the present 25 per cent of all supply to around 15 per cent, says Ajay Arora, Partner, Ernst and Young.
The country’s gas mainly comes from the western offshore fields and the balance from Gujarat and the North-Eastern states.
In December 2006, ONGC announced that it had found an estimated 21 to 22 trillion cubic feet (tcf) of natural gas in the Krishna Godavari basin. The company also announced another find in 2006 in the Mahanadi basin, off the coast of Orissa, with an estimated 3 to 4 tcf reserves in place. In addition, in August 2008, the company made four new finds in a another block in the same basin.
State-owned Gujarat State Petroleum Corporation (GSPC) holds an estimated 1.8 tcf of natural gas reserves in the Krishna Godavari area, a substantial holding for the company.
However, analysts maintain that these finds by ONGC and GSPC would take time to come on stream, which would be beneficial for RIL. “Most of the gas finds so far have been from the New Exploration Licensing Policy (Nelp) I and III rounds. Thus, ONGC and RIL would emerge as the prominent players in future. However, while RIL could be the leading domestic supplier, it does not mean it has monopoly over pricing. The regulator will take care of the consumer’s interest,” said a senior analyst.
Src:Business-Standard