The Hindu Business Line : D6 gas block: RIL says it has permission to retain entire area

New Delhi, July 8While the Petroleum Ministry is yet to firm up whether Reliance Industries Ltd (RIL) will get to retain the entire 7,305 sq km of the prolific deepwater gas block off the Andhra Pradesh coast, the company has claimed that the issue of relinquishing a certain portion of the area has already been resolved.

Earlier this week, the company had written to the Ministry that the issue of surrendering some area of KG-DWN-98/3 (D6) has been sorted out, with the block’s management committee allowing the company to retain the entire area. The management committee comprising Government nominees and representatives of the contractor is assigned the task of reviewing the operations in the block.

RIL was responding to a communication from the Ministry, which said that the matter was still open and that there could be some modification in the area being held by the company in D6. This issue came to the forefront when the Ministry was considering whether to ratify the decision of the Directorate General of Hydrocarbons (DGH) to allow RIL to own the entire block and not relinquish a portion of the area as envisaged in the production sharing contract (PSC).

Phase-three activity

Sources told Business Line that RIL was currently implementing phase three of exploration activities and simultaneously undertaking development work in the discovered areas in D6. As per the PSC, a contractor has the option to relin quish a minimum of 25 per cent of the area after phase one (three years), and at the end of the second phase, the contractor has to relinquish all areas except those in which hydrocarbons have been discovered and for which an appraisal programme or a development plan has been drawn up as per the contract.

RIL has been given 13 months and nine day’s extension by the management committee, beginning June 7 this year until July 15 next year, to finish its exploration activity in the block. For a contractor, the decision of the management committee is taken as final, sources added. The company had sought extension of exploration licence for the block as its activities in phase one had got delayed due to external factors.

Study proof

RIL, after the end of phase one of the exploration activities, informed the management committee that it was confident of hydrocarbon reserves in the entire block and wanted to retain the entire contracted area. To this, the company was asked to do a three dimensional seismic study to prove their claim.

The company had been able to get the management committee nod on the basis of the work done by it, which showed that the prospects were high in the block.

The discoveries Dhirubhai 1 and 3 in the block are said to have in place reserves of 11.3 trillion cubic feet of gas. RIL has made 16 discoveries in the block from the 18 wells drilled. An official assessment of total in-place reserves from the block is yet to be made.

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