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Richa Mishra

New Delhi, March 9 Reliance Industries Ltd (RIL) is set to surrender three blocks in the Kerala-Konkan (KK) basin, with the Government deciding against granting special status to these blocks.

Both RIL and ONGC had sought special R&D status for their blocks in region which would have given them five additional years for undertaking exploration and production activities.

According to the exploration companies, special status was being sought for these blocks because exploration in the Kerala-Konkan basin requires a completely different approach from the traditional methodology due to volcanic emplacements.

Besides, the difficult geological conditions make it tough for the companies to undertake exploration activities as it requires more time and advanced technological application.

Mr P.M.S. Prasad, President and CEO-Petroleum, RIL, told Business Line that “The company is yet to officially communicate to the Government, but it has taken a decision to surrender these blocks.”

RIL has seven blocks in the basin out of which, in three blocks it has already completed more work than what has been committed under the minimum work programme, he said.

“Also the timeline for completing the exploration activity has expired and the company does not want to seek any extension,” he added.

As regards the remaining four blocks of RIL, the company still has time to begin exploration activities. Of the four blocks — two are in deep-water and two were awarded to the company in the fifth New Exploration Licensing Policy (NELP) round.

The decision not to grant special status to the blocks in Kerala-Konkan basin was taken by an empowered committee of secretaries. It felt that considering the request would set a wrong precedent. Besides, grant of a special status to these blocks cannot be done without the Cabinet’s nod as R&D status would extend the exploration period beyond the stipulated time-frame.

According to the NELP provisions, the total exploration period cannot exceed seven years for a shallow water block and eight years for a deep-water block.

The blocks located in the Kerala-Konkan basin are deep-water blocks and require deep-water oil rigs which are currently in short supply.

The special status would have given both firms additional five years, by which time, the availability of rigs would have improved. ONGC has 10 blocks in the region. It has already relinquished three blocks in the basin.

More Stories on : Petroleum | Outlook | Reliance Industries Ltd | Research & Development

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