Ministry makes last-ditch efforts to hold back BHP Billiton

Richa Mishra New Delhi | Updated on March 13, 2018 Published on October 28, 2013

The Govt is trying to make business hassle-free here, and regulatory hurdles can no longer be used as an excuse to exit the upstream business, says a Ministry official.

The Petroleum & Natural Gas Ministry will invite BHP Billiton, which recently surrendered nine oil and gas exploratory fields it won at auctions citing regulatory trouble, for a meeting next week to discuss the issue.

A senior Petroleum Ministry official said the Ministry would try to convince the world’s largest miner to change its decision.

“Though there is not much that can be done once a contractor decides to relinquish the block, the least the Ministry can do is to convince them (to change their decision). We have called them for a meeting next week,” said the official, who requested anonymity.

Recently, BHP Billiton relinquished six blocks it won in the seventh round of the NELP (New Exploration Licensing Policy) auction in which it owned a 26 per cent stake, and three fully owned blocks awarded to it under the eighth round of auction, saying it was unable to explore these blocks due to regulatory issues.

The Anglo-Australian miner, however, retained its 50 per cent interest in the block it secured in the ninth round , and co-owns with the BG Group.

The official said the company had applied for Defence clearance for undertaking exploration activities in these blocks 2011.

The same year, the Defence Ministry informed the Directorate General of Hydrocarbons (DGH) that approval for undertaking the Bathymetry survey (to measure depths of water bodies from the surface) had not been accorded as these blocks were located in the naval exercise area. The Defence Ministry had advised the DGH to rework the areas so that the exploration activities did not fall in the Naval exercise area.

After examining the same, the DGH requested the Defence Ministry to shift the Naval exercise area. Thereafter, approvals did come in phases with certain conditions. The decisions were conveyed to BHP Billiton.

However, the company had concerns over the conditions imposed, including the one to clear the area in seven days’ notice and that permanent structures could be erected only after the Defence Ministry’s approval.

BHP Billiton was also told that the standard operating procedure has been prepared by the Defence Ministry so that both parties (the ministry and the contractor) can work together.

“But BHP has decided to exit. We are processing their request,” the Petroleum Ministry official said.

The official added the Government is taking initiatives to make the exploration business hassle-free here, and regulatory hurdles can no longer be used as an excuse to exit the upstream business.

The Cabinet Committee on Investment has been taking quick decisions to ensure continued exploration activities where work had stopped due to several issued raised by the defence, commerce and environmental ministries.

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Published on October 28, 2013
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