RIL is set to be the first oil and gas private major to develop an oil and gas

RIL is set to be the first oil and gas private major to develop an oil and gas market in the country. It will be inviting price quotes from oil refining companies. This would also set the first benchmark for market-driven prices in the crude oil sector. RIL has had initial round of talks with refinery companies such as Hindustan Petroleum Corp for its Vizag refinery, Mangalore Refinery & Petrochemicals and Chennai Petroleum Corp, to name a few.

RIL would float the tender in a few days when the company would set an indicative benchmarked price based on the quality of the crude. Initial tests have shown the crude to be sweet and light in nature, which is a premium crude. Refinery companies bidding for the crude oil will have to quote a price that is a discount or a premium to the indicative price. Although a final decision is yet to be taken, RIL which has two refineries, including the one being developed by Reliance Petroleum will not bid for the crude. This is aimed at keeping the price discovery process as fair and transparent as possible.

The company is planning to produce 40,000 barrels of oil from the MA field, which is a part of RIL’s D6 block. The government has approved $2.2-billion field development plan (FDP) of the MA field. The production is likely to commence in the second half of 2008.