Cairn India has written to the oil ministry stating that a large portion of its KG basin block is not conducive for exploration as the cabinet committee on investment (CCI) retained ?No Go? restrictions on the middle part of the diagonally square block.
The CCI had earlier this year lifted the defence ministry’s ?No Go? restrictions on just a portion of its KG-OSN-2009/3 block.
This was because the remaining portions of the offshore block were within the impact zone of Indian Air Force’s (IAF) Suryalanka Guided Weapon Firing Range (GWFR) and Machhlipatnam launch site.
Cairn India on April 26 wrote to the ministry saying that after the CCI decision, 35% of its KG-OSN-2009/3 block is ?No-Go? area, which runs right through the block, leaving small portions on either side for exploration.
The company stated that of the remaining block area, 20% is ?Clear Area? and the remaining is ?High Risk Area?, where exploration activity has been permitted with certain conditions.
This leaves only 40% of the original contract area feasible for proper and effective exploration.
A Cairn India official said the ?No Go? restrictions run right through the areas of the block which hold the greatest potential for hydrocarbon reserves.
Moreover, it now becomes logistically very difficult to do any meaningful exploration in the remaining portions of the block.
The company has requested the ministry for a cut in its minimum work commitment in proportion to the reduction in the operationally feasible block area.
Eight blocks, including RIL’s KG-D6 block and gas discovery area of NEC-25 in the North East Coast (NEC) region, were declared ?No Go? zones for reasons like overlapping with a proposed naval base or being close to missile launching and air force exercise area.
The CCI cleared five blocks of the ?No Go? restrictions while three others will continue to be ?No Go? areas. ONGC’s KG basin blocks KG-OSN-2005/1 and KG-OSN-2005/2 and BG Group’s
KG-DWN-2009/1 will remain ?No Go? areas as they fall directly within a proposed naval base.