Reliance Shuts Oil Output at KG Field to Attach More Wells

By Rakteem Katakey

March 30 (Bloomberg) -- Reliance Industries Ltd., India’s most valuable company, shut its oil-producing field off the nation’s east coast to attach two more wells to increase output, a company official said.

Production was closed on March 22 and is expected to resume on April 20, said the official who didn’t want to be named because of company rules. Output will rise to 40,000 barrels a day once the MA field in the Krishna-Godavari basin begins production again, he said.

The field was producing 18,000 barrels a day before it was shut down, the official said.

Reliance has sold 350,000 barrels of oil from the field to Chennai Petroleum Corp., a unit of India’s largest refiner Indian Oil Corp, before the shutdown. The oil was sold at a discount of $5.38 a barrel to the price of Brent crude oil on the day on sale, according to the official.

Hindustan Petroleum Corp.’s refinery in Andhra Pradesh state had bought the first cargo of 450,000 barrels at a similar discount, the official said.

Mumbai-based Reliance had shut the field on Dec. 9 after equipment failed at the site, according to the official. It resumed production in mid-March.

To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net.