ONGC, others pare KG basin work commitment

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SummaryOil sector points to clearance-investment disconnect

the official said.

MWP commitments are submitted by contractors while bidding for oil and gas blocks. It stipulates the minimum amount of work that the contractor is prepared to undertake during the exploratory phase including surveys, exploratory drilling, etc.

ONGC's KG-OSN-2009/4 block was awarded to a consortium of ONGC (50% and operator), Oil India (30%), NTPC and AP Gas Infrastructure Corporation under New Exploration Licensing Policy-VIII bidding. This exploration block is a shallow-water block and the PSC was signed in June 2010. ONGC has so far invested about $0.44 million in the block.

Cairn also received a partial CCI clearance for its KG-OSN-2009/3 block that lies adjacent to the ONGC block. Around 35% of the block is in the so-called "no-go" area. 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.

The RIL-BP KG-DWN-2005/2 block on the other hand covers an area of 1,949 sq km, and was awarded to BP along with Reliance Industries in the seventh round of auction under NELP in 2008. BP wrote to the oil ministry that around 70% of the block falls in an area where DRDO and navy exercises are conducted and it is not commercially feasible to produce from the rest of the block.

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