TN PETRÓLEO

Calgary-headquartered Niko Resources Ltd. said the Dhirubhai 1 and 3 discoveries in D6 block of the Krishna Godavri Basin, off the east coast of India, are expected to start producing gas during the third quarter of 2008.


Additionally, oil production from the MA discovery in the same block is also expected to start in the same period.

India's largest private sector company Reliance Industries Ltd (RIL), is developing the offshore gas field known as Block KG-DWN-98/3 (KGD6) in the Krishna Godavari Basin. Canada's Niko holds a 10 percent participating interest.


The development plan for the Dhirubhai 1 and 3 gas fields provides for natural gas production at a rate of 2.8 billion cubic feet per day envisaged within the first year of production operations, Niko Resources said in a press release.


It added that the Phase I initial field development costs are estimated at $5.2 billion.


Niko said that numerous other prospects have been identified in deeper water areas of the block where further upside potential will be evaluated.


The company said initial field development costs for the MA discovery are estimated at $1.5 billion.


A large portion of these costs will be spent subsequent to start-up to drill and tie in four of the planned six oil development wells and after a period of oil production, to convert some of the oil wells to gas producers, it said.


The company also said it will drill three new locations at its 100 percent-owned Cauvery block in early 2009 after two wells it drilled in 2008 indicated no significant hydrocarbons.


Niko also holds a 10 pct working interest in the NEC-25 Block, off the east coast, with RIL holding the remaining 90 percent.


Development plans for the six discoveries on this block that have been declared commercial by Indian regulators have been approved by the joint venture's operating committee and submitted to the Indian government.


At 2:46 p.m. local time, RIL shares were trading 2.09 percent lower at 2292 rupees on the Bombay Stock Exchange while the benchmark Sensex was down 2.32 percent at 14,742.97.