Differences with Comptroller & Auditor General continue

After almost a 15-month lull, the Reliance Industries-operated D6 block is going to see some drilling activities, which will help increase output from the country’s largest gas fields.

The operator is going ahead with the drilling activity despite the continued difference with the Government auditor on whether the Comptroller & Auditor General (CAG) can do a performance audit for private entities.

The CAG has reportedly been asking the Petroleum Ministry not to give the go-ahead to RIL’s D6 investment plans, till the operator agrees to unconditional audit.

“RIL has been maintaining that it has no objection to any audit, provided it is done according to the production sharing contract,” a company official said. Asked if RIL can carry on with its activity under the circumstances, an official said, “When has RIL waited for any communication.”

The first week of December will see Reliance and its partners in the East Coast block start drilling work, with the rig scheduled to arrive on November 28.

The Directorate General of Hydrocarbons is understood to have given its nod to the contractor to undertake drilling activity in one of the four satellite fields discovered in the D6 block.

Once the formal communication is received from the Government, the company plans to drill a well – G2 – in D19 satellite discoveries in the block, sources said.

Falling output

D6 block has been drawing public attention more because of its falling output after hitting a peak of 60 mmscmd in 2009-end. The major fields in the block D-1 and D-3 and MA together produce 24 mmscmd. If all the four satellite fields, coupled with R-Series discovered in the D6 block go on stream, then the estimates show that the operator can produce additional 30 mmscmd.

The rig, which is arriving next week, is on a long-term lease. It is partly owned by RIL and partly by Transocean. Industry observers say the drilling activity will start in prime time which goes up to March-April, provided there is no cyclone. It gives enough time to a contractor to undertake exploration activities.

Three priority wells

The contractor plans to drill three priority wells. A single drilling activity costs around $ 30-50 million and an equivalent amount goes in hooking the well for production, sources said.


(This article was published on November 21, 2012)
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