Neduvasal field out of GEM Lab’s reach

A month after GEM Laboratories was awarded its maiden hydrocarbon asset in Tamil Nadu, the company is yet to gain access to the block.

The Karnataka-based GM Group company, a new entrant in the oil and gas space, has got the ‘no objection certificate’ from the earlier owners of the discovered small field, ONGC.

On Thursday, the company submitted a request to the Tamil Nadu government for the transfer of mining lease from ONGC to it. A copy of the request has been delivered to the Directorate General of Hydrocarbons (DGH).

“It seems that getting the state government’s nod on the transfer of mining lease from ONGC to GEM may not be easy in view of the ongoing protests against exploration activity in the block,” a source closely associated with the project told BusinessLine .

But, the company is not giving up. The block at Neduvasal, which GEM Laboratories has won, is embroiled in controversy, and the issue has taken a political turn now.

There were allegations that permission was not obtained by the state government before starting exploration activity or putting the block under the hammer in the recently concluded Discovered Small Field (DSF) Bid Round 2016.

Cases have been filed with the National Green Tribunal (NGT). However, GEM has decided to stop pursuing the issue at NGT and is instead adopting a consultative approach to resolve issues on the ground, another source said.

The uncertainties are likely to delay the company’s submission of the field development plan (FDP) to the Directorate General of Hydrocarbons on time.

When contracts were awarded on March 27, the contractors were asked to submit FDPs within six months of the signing of contract.

But, in this case, the contractor has not been able to visit the asset as yet.

“Given the circumstances, the company can be given some respite, if required,” Director General, DGH, Atanu Chakraborty, said.

At the current rate, the company may require at least six months to complete the entire regulatory process.

GEM Laboratories was among the 22 companies that had won in the Discovered Small Fields Bid Round 2016.

At the contract signing event, Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum & Natural Gas, had said, “The residents of Neduvasal will be taken into confidence before drilling begins there. I reiterate that there is no threat to farmland from the exploration project.”

The GM Group that has now ventured into oil and gas is into diversified businesses with major focus on sugar, mining, education, power generation, agro industries, finance, hospitality and retail.

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