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Govt may not penalise RIL for delay in gas production

Govt may not penalise RIL for delay in gas production
PTI
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First Published: Tue, Sep 02 2008. 11 08 AM IST
Updated: Tue, Sep 02 2008. 11 08 AM IST
New Delhi: Reliance Industries’ (RIL) much talked about D6 gas field is facing delays in beginning of production but the Government is unwilling to penalise for missing the schedule.
“I have been told that there is a little bit of delay in gas production from RIL’s D6 fields because of technical reasons,” Petroleum Secretary R S Pandey said.
Petroleum Minister Murli Deora and his deputy Dinsha Patel had told Parliament on several occasions that Reliance will begin gas production from D6 in July 2008.
Pandey, however, stated that Reliance was likely to begin gas production from D6 by end-October. “By October-end gas will start flowing, that is what I am told,” he added.
The company on its part had initially said that gas production from D6 would begin in third quarter of 2008 but later stated that what it meant was third quarter of 2008-09 fiscal.
Pandey said that the Government was not planning to impose any penalty on Reliance for the delay. “There is no penalty for delay,” he said.
Meanwhile, Reliance today said that it no longer plans to transfer 80% of its D6 stake to four unlisted wholly- owned subsidiaries.
“Our projects are nearing completion and we have successfully raised the finance and so do not wish to pursue the application seeking approval to assign our participating interest to our 100% owned subsidiaries and have since withdrawnthe application,” a company press release said.
Interestingly, a company spokesperson had just last week stated that Reliance had applied for stake transfer to raise finances for gas development project.
Reliance had about two months back proposed to transfer 80% of its 90% interest in Block KG-DWN-98/3 or D6 in the Krishna Godavari basin off the east coast and oil regulator DGH had last month given its no-objection.
Mukesh Ambani-run RIL currently owns 90% stake in D6 where 18 oil and gas discoveries have been reported till date. The remaining is with Niko Resources of Canada.
It wanted to transfer the stake to four unlisted wholly- owned subsidiaries to enhance flexibility to raise finances.
A company spokesperson had last week stated: “This is common global practice and would enable the company to enhance its financial flexibility as the company builds its exploration and production portfolio.”
Reliance is to produce 25 million standard cubic meters per day of gas from October-end that would scale up to 40 mmscmd by March 2009.
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First Published: Tue, Sep 02 2008. 11 08 AM IST
More Topics: Reliance | Parliament | Gas | Penalize | Government |