RIL discovers gas in Mahanadi basin block

Reliance Industries has found natural gas reserves in a well drilled on its NEC-25 block in Mahanadi basin, off the Orissa coast, the company's junior partner Niko Resources of Canada said on Friday.

Gas was discovered in the well AJ2 last month, Toronto-listed Niko said in a regulatory filing.

A source in know of the development said this is not a new discovery but appraisal of earlier gas finds. "AJ2 is an appraisal well drilled to access the potential in the previous A6 and J1 discoveries. Gas was struck in AJ2 but it is not a new pool."

Since AJ2 is an appraisal well and not a new discovery, RIL - the operator of the block NEC-OSN-97/2 or NEC-25 - has not made any announcement.

Niko Resources holds 10 per cent interest in the Mahanadi basin shallow water block covering an area of 10,755 sq km in water depths ranging between 20-600 meters. RIL holds 90 per cent interest in the Bay of Bengal block.

RIL has so far made eight gas discoveries in NEC-25, off which six were declared commercially exploitable and development plan submitted to the Directorate General of Hydrocarbons (DGH) in 2007.

Field Development Plan (FDP) is investment proposal for bringing to production oil or gas finds. Operators like RIL can only begin such investments after getting the necessary approval from DGH, the sector regulator.