RIL tightens belt in oil hunt business
Mukesh Ambani-controlled Reliance Industries Ltd (RIL) is on a cost-cutting spree in a mood of global recession and local slowdown, and its oil exploration arm is particularly feeling the crunch, reports Suprotip Ghosh.business Updated: Dec 04, 2008 20:58 IST
Mukesh Ambani-controlled Reliance Industries Ltd (RIL) is on a cost-cutting spree in a mood of global recession and local slowdown, and its oil exploration arm is particularly feeling the crunch.
Employee movement and maintenance costs are being kept on a leash in the exploration and production (E&P) arm, and rigs and installations at the Krishna-Godavari (KG) offshore basin and the Panna-Mukta-Tapti fields are on a basic maintenance routine, with other activities held back, said sources in the company who did not want to be identified.
RIL did not respond to e-mails seeking comments and details. But an official at the company’s communication consultancy firm Neucom confirmed cost cuts in RIL, with the focus on travel, but denied cut-backs in E&P. “Most of the infrastructure in the drilling and production areas are in place, and they will be recovered once RIL begins selling the proceeds from the wells,” the official said.
E&P entails huge costs in keeping up production facilities in deep water oil and gas wells. RIL has invested close to $5.2 billion (Rs 25,000 crore) in the KG-D6 basin. Most of the construction work at the site is already over.
E&P work involves routine visits by technical personnel whose movements are now under check. Fresh recruits have also been put on a slow gear, the sources said.