The expansion will require a substantial investment, as and when the government clears the proposal, from the three promoter-partners since the production of gas in the existing facility can be increased at most to about nine million tonnes a day, Reliance managing director Anil Ambani told reporters at a press conference on Monday. The total capital expenditure in developing the three oil fields has been over Rs 1,800 crore to date.

The current capacity of around five million tonnes a day is being sold to Indian Oil Corporation and Gas Authority of India Ltd. The joint venture proposes to increase gas production capacity in phases to around nine million tonnes a day by2000-2001.

Ambani said the oil and gas business, which is a division of Reliance, contributed about 5 per cent to the company's turnover of Rs 13,404 crore during 1998-99.

Reliance had formed the joint venture with ONGC and Enron to develop the Panna, Mukta and Tapti oil fields. While Reliance holds 40 per cent of the equity, ONGC and Enron hold 30 per cent each.Oil production at Panna and Mukta oil fields has been projected to reach 45,000 barrels a day by 1998-99, while sale of gas has reached two million cubic meters a day. Gas production at the Tapti field has been commissioned in March 1997.

The production for 1997-98 was 1,41,000 tonnes, while the gas production from Tapti fields, which commenced in June 1997, was 11,500 BBTU. During the period under review, production volumes increased nearly three times from 1.8 million tonnes to 5.2 million tonnes.

Lower prices resulted in strong demand domestic growth and almost entire volume was marketed in the domestic market, thereby enhancing the marketshare in almost all the products.

Ambani said the Reliance group was open to increasing capacity of Reliance Petroleum to over 18 million tonnes a year. Further expansion of Reliance Petroleum capacity will depend on further dismantling of the administered price mechanism (APM) and further reforms in the hydrocarbon sector.