Oil Ministry yet to sanction development plans for RIL’s 9 satellite discoveries

At a time when energy security and prolific resource development is of top priority to the government, Oil ministry has deferred sanctioning Reliance Industries Limited ‘s (RIL’s) nine satellite gas fields which the operator discovered in 2007. Directorate General of Hydrocarbons (DGH), the technical arm of oil ministry, noted that oil ministry officials on the panel that oversees operations in KG-D6 field have not yet approved the gas finds made by RIL, even though it has been years since they were discovered.

As per industry norms, after a gas discovery is made, its potential is assessed to ascertain if the field can be developed commercially. A Declaration of Commerciality (DoC) is sought and once the DoC is approved by the Management Committee (MC) – a body which oversees operations in the block – an investment plan is drafted to state the development plans for producing gas from the noted field. In RIL’s case, the oil Ministry is yet to grant a DoC, without which the energy operator cannot begin work on the field development plans.

Reliance Industries has, so far, made 18 gas finds in KG-DWN-98/3 block, more commonly referred to as KG-D6 block, which lies off the east coast of Andhra Pradesh. Of these, two fields – Dhirubhai-1 and Dhirubhai-3 (D1 and D3) have been put under production while nine others (D-2, D-4, D-6, D-7, D-8, D-16, D-19, D-22 and D-23) have been declared as commercially viable by DGH. However, the Oil Ministry sanctioned the DoC of only D-2 field from among the nine fields, which was discovered in April 2002.

DoC for the remaining eight fields has been awaited since November 2007. DGH, in support of RIL stated that the Declaration of Commerciality (DoC) of eight satellite gas discoveries (D-4, D-6, D-7, D-8, D-16, D-19, D-22 and D-23) was reviewed in the MC meeting on November 22, 2007. An MC resolution, which declares the eight finds as viable for commercial production of gas, has been signed by MC nominees of the joint venture (RIL) and its minority partner (Niko Resources of Canada) and the first government nominee (DGH). Only Ministry of Petroleum and Natural Gas’ consent is still awaited on MC resolution. Presently, DGH has forwarded a letter to the ministry for approval of RIL’s fields and sanctioning their development plans at the earliest.

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