Hyderabad, Aug. 12: Reliance Industries has decided to go ahead with crude oil production from the Krishna-Godavari (K-G) basin Dhirubhai-26 fields as there are no legal restrictions on oil production from the basin. RIL sources said production of crude oil will start from the third week of September and an estimated 20,000 barrels of oil are likely to be produced per day during the initial period. "The production will reach up to 40,000 barrels per day during the peak production period. But it will take some more time before production reaches the optimum level," the company sources said. Sources said the cost of crude oil production will be about $28 per barrel, which is a whopping $100 less than the international crude price. But, RIL will decide on the selling price after assessing the domestic market conditions. The Floating Production Storage Off-loading (FPSO) vessel, which will manage the process of crude oil production in the middle of the Bay of Bengal, has already started from the Singapore coast. According to the company officials, the vessel is likely to reach the Krishna-Godavari basin in a week's time. The FPSO will be deployed at the Dhirubhai-26 field, which is located at a depth of 1,000-1,400 meters, some 60 kilometres from Kakinada. "It will take exactly a month for the FPSO vessel to start working after it reaches the K-G basin. RIL is the first company to explore oil from deep waters" said a company official. As the legal tangle between Mukesh and Anil Ambani is yet to be resolved, the RIL is looking at expediting oil exploration. Sources said RIL has begun discussions with the Chennai Petroleum Corporation, a subsidiary of Indian Oil Corporation Ltd, the country's largest refining company for sale of its crude oil. Reliance is making all-out efforts to begin production of gas from its K-G fields by December this year. But because of legal troubles, it is not willing to announce the same. The actual delivery of gas will begin only after the Mumbai High Court, which is currently hearing the case between the Mukesh and Anil Ambani pronounces its verdict.