The government is likely to clear digging for oil at two major off-shore blocks in the Eastern coast overruling objections by the department of space.
One of the blocks has run up against objections for the past eight years. The Cabinet Committee on Investment is expected to give the final clearance for this exploration block which is a three way consortium between Italian company ENI and the Indian public sector ONGC and GAIL.
The AN-DWN-2003/2 is a deep water block located off the Andaman and Nicobar Islands. The department of space had refused to grant permission for exploration arguing “there is a probability of debris falling from the launch vehicles”.
To sort out the differences principal secretary in the PMO, Pulok Chatterji held more than one meeting among the departments to sort out the hurdles.
The clearances are part of the pro-active steps being taken by the Cabinet Committee on Investment to clear projects of above Rs 1,000 crore on a fast track basis to help the economy recover fast. The CCI has so far cleared about Rs 1,00,000 crore of investments since it was set up in December 2012.
However, even now while the department of space has assured that no missile launching will take place in the contract area, the consortium led by ENI has to ensure that only seabed pipeline will be laid in the area and will be ready to “move out of the declared danger zone before a launch”.
The other block expected to be cleared is the PR-0SN-2004/1 by a consortium led by Cairn India with ONGC and Tata Group. This ran into a problem as it is a shallow water block in the Pennar basin close to Sriharikota and has been pending since 2007.
The space department has claimed “there could be radio frequency interference and risk of debris falling if activities are carried out within the zone”. While the ENI consortium has already spent Rs 361 crore on the project so far the expenditure for the Cairn block is close to Rs 240 crore.
The government is also concerned that the denial of permission can be legally taken as a default by the sovereign and which could open up costly arbitration in international forums.