New Delhi: Reliance Industries has sought oil secretary G C Chaturvedi’s help to get stalled approvals for development of additional gas fields and price approval for sale of gas produced from coal seams (CBM).
RIL late last month had written to Chaturvedi on his ministry and its technical arm DGH withholding approvals for satellite and R-Series fields in KG-D6 block that would help offset the decline in output of the flagging main fields.
It highlighted the KG-D6 oversight committee, made up of representatives of the oil ministry and the DGH, withholding nod for three gas finds in KG-D6 block and two in Orissa offshore NEC-25 area by wrestling powers to declare a gas find as commercially viable when the contract provides the panel the role of only “review”.
“While concern is being repeatedly expressed about the fall in production from the D1&D3 fields (in KG-D6 block), we find that all our proposals for augmenting production from other finds do not seem to be making much headway,” RIL executive director P M S Prasad wrote.
RIL’s $1.529 billion plan for bringing four satellite fields around the flagging D1&D3 gas fields to production has been awaiting approval since 2009 and now the ministry and DGH want the costs to be reworked in view of changed prices.
The ministry and DGH have also refused to give nod to a $73 million pre-development work in limited weather window available in Bay of Bengal from December to March, 2012, for gathering more data to make an informed development plan.
Stating that such a cost can be adjusted against the final development plan, Prasad said despite the Production Sharing Contract (PSC) as well as past precedent providing for such work, “government nominees on the Management Committee (that overseas operations of KG-D6 block) are now insisting that pre-development activities are not covered in the PSC.”
If the approvals don’t come, the company would lose the four-month weather window and would then be forced to wait for one full year to begin work.
RIL said Declaration of Commerciality of discoveries D29, D30 and D31 in KG-D6 block and D32 and D40 in NEC-25 have been pending with management Committee since February 2010 over tests used to ascertain the finds.
Prasad said RIL had submitted price formula for sale of coal bed methane (CBM) gas from Sohagpur (East) and Sohagpur (West) blocks in Madhya Pradesh blocks in September but approval has not come inspite of completion of 60 day mandated period.
RIL wants the price at which RasGas of Qatar sells liquefied natural gas (LNG) to India on a long-term contract saying it is an arms-length price.
“They delay in the approval impacts project schedules and our ability to bring CBM gas to production,” he added.