The Hindu Business Line : Exploration cos seek time to submit field development plans

Working structure
Petroleum Ministry asks DGH to suggest extension policy framework.
Seeks details of contractors who delayed submission of appraisal programme, development plans.
Also asks for details on amount of damages proposed to be levied for granting extensions.

New Delhi June 6 Oil and gas exploration companies that have struck hydrocarbon and are planning to seek an extension of time for submission of field development plan (FDP) may have to follow a new policy.

Faced with a unique request from Cairn Energy India Ltd for its Ambe field, the Petroleum Ministry is working towards evolving a policy to grant extension of time to exploration companies to submit their FDP.

The situation is unique because Cairn, along with its partner ONGC in Ambe field, wants to combine the development of North Tapti and Ambe fields together.

While Ambe field belongs to a consortium of ONGC (50 per cent), Cairn Energy India (40 per cent) and Tata Petrodyne Ltd (10 per cent), the North Tapti field is owned by ONGC. The fields are in close vicinity of each other on the West Coast — Gulf of Cambay.

Sources said developing these fields on a standalone basis may not prove to be economically very viable, thus the companies involved are looking at combining the development of these two fields.

"The request of extension of time for submission of the development plan is a first case of its kind. Hence, a need is felt to have clear guidelines for such extensions," sources told Business Line.

The Petroleum Ministry has requested the Directorate-General of Hydrocarbons (DGH) to suggest a guiding framework for evolving a policy, sources said. Based on the suggestions of the DGH, the Ministry plans to work out a proposal for consideration of the Empowered Committee of Secretaries.

The Ministry has asked the DGH to clarify on the number of production sharing contracts (PSCs) where the contractors have actually delayed the submission of the appraisal programme and development plans to the management committees.

Details have also been sought on the number of PSCs where the contractor has approached for extension for submission of the appraisal programme and field development plan as well as the reasons under which such delays have taken place.

Besides, the DGH has also been asked to clarify the number of PSCs where such delays are likely to happen in the next one year, and whether separate treatment will be needed for contracts under the New Exploration Licensing Policy (NELP) and pre-NELP.

Examining reasons

The Ministry wants to examine all possible reasons and circumstances envisaged under which the contractor could ask for extension of time for submission of appraisal programmes and development plans, sources said.

The amount and basis of damages proposed to be levied for granting extensions, keeping in mind the overall aim of early development and as deterrent against such delays, has also been sought by the Ministry.

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