The Hindu Business Line : ONGC may ask Govt to revoke order on deepwater blocks

Snapshot
ONGC says it has made sufficient progress in the blocks, leading to identification of a promising gas prospect in KG basin, and is well within the granted time schedule for exploration in at least four out of five blocks.

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Kolkata/New Delhi Jan. 25 ONGC may seek reversal of the Petroleum Ministry's recommendation for relinquishment of five deepwater blocks awarded to it prior to the New Exploration Licensing Policy (NELP) rounds. The company would cite reasons of major delay in exploration due to change in Government policies. The blocks are in Krishna-Godavari, Kutch-Saurashtra and Kerala-Konkan basins.

According to a senior company official, ONGC has made sufficient progress in the blocks, leading to identification of a promising gas prospect in KG basin, and was well within the granted time schedule for exploration in at least four out of five blocks. This was in spite of losing at least one-and-a-half years in an effort to rope in foreign partner(s) for deepwater exploration as per an earlier recommendation from the ministry. "We will shortly clarify our position to the Ministry and seek its approval to resume exploration on our own," he added.

ONGC had recently proposed exploring three KG basin blocks in collaboration with British Gas and one Kutch-Saurashtra block in collaboration with British Petroleum. Discussions were also held with BHP Billiton for development of one Kerala-Konkan block. While rejecting the company's plea for farming out stakes in favour of BG and BP, the Ministry had asked ONGC to relinquish all the blocks because of its failure to complete exploration within the granted period. All the five blocks were proposed for auction in the forthcoming NELP round (NELP-VII).

ONGC sources, however, felt that except in one KG basin block, which it may have to surrender, the company was well within the granted time frame for development work.

"We have made sufficient progresses in one KG basin block and identified a prospect as well. We have plans to drill two more wells in KG blocks," he said.

Stating that the frequent changes in Government policies were the cause for delays, the official said that though awarded on a nomination basis the Ministry had later asked ONGC to conform to the NELP-V terms and conditions. "Accordingly, we had stopped working in the blocks and initiated negotiation for foreign collaboration. Finally, BG, BP and BHP Billiton evinced interest. Of the three only BG could submit its tender on time, BP was late and BHP Billiton wanted more time for some managerial reasons. The entire process took over a year," he said.

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