Millennium Post
Business

Foreign experts can examine RIL’s low gas output: Moily

Oil Minister M Veerappa Moily on Friday hinted that the government may appoint an international expert to ascertain the reasons for sharp fall in natural gas production at Reliance Industries' KG-D6 fields.

'There are world renowned experts who definitely can go into these things and can come out with the truth. We don't want to prevent any truth from coming out,' he told reporters on the sidelines of a conference organised by Indian Chamber of Commerce.Oil regulator DGH has blamed RIL's failure to drill committed wells for the gas output falling by 80 per cent to 10 million standard cubic metres per day from the main D1 & D3 fields in KG-D6 block, instead of rising to the planned 80 mmscmd.

On the other hand, RIL and its partner BP plc of UK feel that the reserves have dropped one-third to under 3 trillion cubic feet due to previously unknown geological factors and the undrilled quota of 11 wells would not increase production.Moily's ministry has been mulling appointing an international reservoir expert to ascertain facts.

'Truth is truth, nobody can prevent it, nobody can manoeuvre it,' he said adding his ministry was 'consciously' working towards unravelling the truth.

DGH wants $1.786 billion penalty to be levied on RIL for its 'failure' to produce projected quantity of gas as Oil Ministry in a parallel move wants the company to be denied the benefit of gas price revision upon expiry of current $4.2 per million British thermal unit rate in April 2014.
'The question is that if gas is available, yes gas is available. There experts who can find out,' Moily said.
Speaking at the conference, he said that his ministry will go 'strictly according to the rules'.

'The government is not willing to deviate an inch from the Production Sharing Contract (PSC),' he said adding if one field was sick it did not mean the entire country was sick.

A KG-D6 block oversight panel headed by DGH had earlier this week refused to take a view on appointing renowned reservoir consultants Ryder Scott, DeGolyer and MacNaughton (D&M), Gaffney, Cline & Associates (GCA) or Netherland, Sewell & Associates to validate reasons for the fall in gas output.

Oil Ministry officials -- Aramane Giridhar, joint secretary (exploration); S C Khuntia, additional secretary and financial advisor and VLVSS Subba Rao, advisor (finance) -- attending the one-hour long MC meeting did not convey any decision.

RIL-BP feel drilling of the remaining 11 wells would require over $1.65 billion investment while the currently available reserves can be produced by spending around $0.5 billion in repairs and compression of existing wells. The appointment of an independent international expert, which RIL-BP have been pressing for several months now, would establish who is right and who is wrong, sources said.

Meanwhile, CPI leader Gurudas Dasgupta on Friday  accused Petroleum Minister M Veerappa Moily of stalling relinquishment of over 6,000 sq km of land in the KG basin by RIL, saying the government could realise a whopping Rs 60,000 crore by selling gas discovered in this area.
‘If this area is relinquished and the discoveries handed over to ONGC for production, the government can realise Rs 60,000 crore through the sale of gas from these discoveries,’ he said in a letter to Prime Minister Manmohan Singh.
In this context, he referred to two reports of the Director General of Hydrocarbons (DGH) and CAG recommendations which suggested relinquishment by RIL of this area from the KG-D6 block.
In the letter, he quoted DGH reports as saying that the Petroleum and Natural Gas Ministry ‘may intimate to the contractor (RIL) about PEL (Petroleum Exploration Licence) in respect of 6601 sq km of contract area in the first instance in the
block KG-D6 under article 3.11 of PSC (Production Sharing Contract)’.

Observing that the DGH view was examined by the Ministry, Dasgupta claimed ‘when the matter reached the Petroleum Minister, he overruled all the officials and directed that RIL should be consulted in the matter! The view of RIL are already on record and further consultation is only being done with an intention to bail out RIL.’

‘We are witnessing a sorry spectacle of the private contractor (RIL) trying to browbeat its own regulatory (DGH),’ the CPI leader said in the letter.He also claimed that ‘a sinister move is afoot to replace the present DGH by a pliable person at
the instance of the Petroleum Minister’.
Next Story
Share it