OilMin to move Cabinet to allow RIL to retain gas finds

The Oil Ministry is seeking Cabinet nod to allow Reliance Industries to retain three gas discoveries worth $1.45 billion in the eastern offshore KG-D6 block even after expiry of timelines.

RIL has not been able to submit a development plan for D-29, 30 and 31 gas discoveries, which hold an estimated 345 billion cubic feet of reserves, with the prescribed timelines due to dispute with the upstream regulator DGH over tests required to confirm them.

The Oil Ministry feels that taking away the discoveries and rebidding the finds may lead to delay in development, sources privy to the case said.

Also, it feels RIL may go to arbitration which may lead to further delay in production and extra cost associated with the arbitration.

The three finds, which can be quickly put on production by RIL using existing infrastructure of currently producing gas fields as well as those being developed, are worth $1.45 billion at current gas price of $4.2 per million British thermal unit.

Sources said the ministry is moving the Cabinet Committee on Economic Affairs (CCEA) for relaxation in the Production Sharing Contract (PSC) timelines to help RIL monetise the finds.

Comments on a draft CCEA note are being sought from the ministries of finance and law besides the planning commission before taking it to the CCEA for approval.

Sources said RIL will have to conduct DGH prescribed Drill-Stem Test (DST) on D29, 30 and 31 discoveries and only half of the $93 million will be allowed to be cost recovered.

EDITORIAL OF THE DAY

  • It doesn’t help if rules paint non-agro & agro commodities with the same brush

    For many years, successive governments have tried to develop commodity markets in India, but have failed to bring in transparency and have been unable

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Sandeep Bamzai

Disequilibrium: The cleansing & the yearning

As Twitter trolls went about their ugly business against Zaira ...

Rajgopal Nidamboor

Of body, brain and placebo effect

While most theories on human nature were based on conscious ...

Kuruvilla Pandikattu

Bias and prejudice exist in science too

Religion has caused a lot of harm to humanity. ...