The Hindu Business Line : Drilling holiday: Ministry asks RIL to submit details

Buying time
The holiday will give the company more time to mobilise the rigs so that exploratory activity is not affected.
It will give RIL a lifeline against the possible penalties for not meeting the work programme commitment.

Richa Mishra

New Delhi, Dec. 4

Reliance Industries Ltd has been directed by the Petroleum Ministry to submit a detailed justification for its request for a drilling holiday for its oil and gas exploratory wells. Faced with rig shortage, RIL has approached the Ministry seeking three-year holiday for exploratory drilling of its deepwater blocks.

“The Ministry has asked the company to give the exact content of its request by Wednesday,” sources told Business Line. The Petroleum Ministry is expected to take up the issue for consideration before the Empowered Committee of Secretaries that is likely to meet sometime this month.

Subsequent to a presentation by RIL on how non-availability of deepwater rigs was impacting its work programme commitment and considering the views of Directorate- General of Hydrocarbons (DGH), the Ministry on Monday asked RIL to submit the details. RIL has 22 deepwater blocks out of which activities in 11 are likely to be affected due to rig shortage.

More time

A RIL official said that the holiday will give the company more time to mobilise the rigs so that exploratory activity is not affected. Currently, in order to ensure that the company does not miss the mid-2008 target of flowing Krishna Godavari Basin gas, RIL is using its existing exploratory rigs for development activity, he added.

The official said that the rigs, which the company has already contracted for and were to come in 2006-07 have been delayed, as the contractors kept extending the deadline. “If the holiday is extended, the company’s chances of mobilising new rigs, which are expected in 2009, also increases,” he said.

Drilling holiday would also give RIL lifeline against the possible penalties for not meeting the work programme commitment given to the Government.

RIL has been facing delays in hiring the contracted rigs — D534, Neptune, and Expedition. These rigs, which were to be mobilised by 2006-07, are now expected by end of this month (D534), May 2008 (Neptune) and October 2008 (Expedition), respectively.

Another additional rig contracted — Blackford Dolphin — that was to join the fleet in October 2007 has also been delayed. Deepwater Pacific, which is a new rig, is expected in July 2009.

Currently, the company has four rigs. Rents of hiring drilling ship has been soaring with rush for oil hunt. Currently, a drill ship costs about $4,75,000 per day.

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Rig unavailability may delay Reliance’s KG basin plans
Reliance may face further delay in rigs deployment

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