RIL tanks 4% on oil well abandonment news by UK partner | business | Hindustan Times
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RIL tanks 4% on oil well abandonment news by UK partner

business Updated: Oct 23, 2009 21:54 IST
HT Correspondent
UK-based Hardy Oil and Gas Plc

The UK-based Hardy Oil and Gas Plc — the 10 per cent joint venture partner of Reliance Industries Ltd (RIL) in the D9 exploration block in the Krishna Godavari basin —on Friday informed the London Stock Exchange (LSE) that the first exploration well in the block will have to be abandoned after encountering “poor reservoir sands”.

The news hammered Hardy Oil’s stock on the LSE by almost 36 per cent, from £546 (Rs 416) to £351 (Rs 298). As knee-jerk reaction, on the Bombay Stock Exchange RIL — the majority 90 per cent partner — shares fell 4 per cent to Rs 2,047.

Hardy had earlier this year announced that the D9 block could have potential gas reserves of 10.8 trillion cubic feet and oil reserves of 143 million barrels, which had raised investor hopes.

Those hopes rose even higher when its neighbour, the D6 block — being explored by RIL and Canada’s Niko Resources —unearthed a huge reservoir of gas along with sizeable oil.

In its statement, Hardy said that the ‘KGD-A1’ well would be “plugged and abandoned”.

“Any rumour of RIL surrendering this block is completely baseless and unsubstantiated,” an RIL statement said.

“There is a commitment to drill three more wells in this block. RIL remains committed to pursuing the exploration campaign within this block.”

“The data obtained from this first exploration parametric well is significant and will be integrated with the existing geological model to improve the understanding of the geology and petroleum system within the block before drilling subsequent wells,” the RIL statement said.