RIL sends SOS to oil ministry for D6 satellite development approvals

RIL sends SOS to oil ministry for D6 satellite development approvals

New Delhi: Fearing it may lose one full year due to delays in regulatory clearance, RIL has sent an SOS to the oil secretary seeking urgent intervention in the grant of approvals for development of satellite fields to offset the dip in output from the main gas fields in the KG-D6 block.

“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," he wrote.

RIL’s $1.529 billion investment 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 company, in the meantime, wanted to carry out $73 million worth of pre-development activities in the limited weather window available in Bay of Bengal from December to March, 2012, and adjust this cost in the approved field development plan.

Prasad said the pre-development activities were required to gather enough/more data and information in order to make an informed development plan.

“However, in spite the requirement of such information is clearly provided in the Production Sharing Contract as well as past precedent in the matter, 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," he wrote.

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.

“While as investors we do need to monetise our discoveries as soon as possible, even for the sake of the country, if more gas has to be brought into production and quickly, it is imperative that government nominees consider themselves equal partners in development and not see themselves as adversaries to the contractor," he wrote.

Prasad said even though the PSC provides only an “advisory role" to MC to only “review" commerciality of a discovery and does not confer it with the right to “approve", the DGH has been refusing to review the Declaration of Commerciality (DOC) for the D29, D30 and D31 finds in KG-D6 block since February, 2010.