Any talk of oil and gas inevitably leads to Reliance Industries and its lucky strikes in the Krisha-Godavari and Cauvery basins in India.
The finds are the foundation for Reliance’s upstream business but a lot of work still needs to be done.
It is estimated that the company is spending $80,000/day in its search for oil and gas. While the investment is paying off, as is evident from the recent discoveries, the company would have to put in at least $2.2bn to commercialise the finds.
Meanwhile, a highly active global E&P environment has pushed up drilling costs. Reliance also faces certain risks – it has reportedly not found either oil or gas in as many as 20 blocks where it has been working for the last six years.
These two factors point to Reliance’s need for international majors as partners. The other reason is technology as 76% of India’s gas reserves are in deep waters and the success ratio is only 16-20%.
Reliance has indicated that it is looking to form either a joint venture or some kind of strategic alliance to develop exploration capabilities in ultra deep water of over 2000 metres. And Chevron, which has a stake in Reliance's new refinery at Jamnagar, is reportedly interested.