Rs 80,000 cr investment: Reliance Industries, others get relief over KG-D6, 6 blocks

Feb 01 2013, 16:24 IST
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SummaryIce has been broken on getting clearance for 39 offshore areas: Govt

declaring 6 blocks in KG basin including KG-D6 producing fields and one in NEC or North East Coast region (Reliance Industries's gas discovery area of NEC-25) as "No-Go" areas and putting stringent conditions on 32 other blocks.

"The issue was discussed threadbare," Moily said the CCI has asked the two ministries to sit together and resolve the issue.

Originally, the Defence Ministry had declared 14 blocks as "No-Go" areas as they over-lapped or were close to proposed Naval base or missile launching range/air force exercise area.

But the Defence Ministry later relented and agreed for exploration to be permitted in 7 blocks in Mahanadi basin. One more block which had previously objected to by the Commerce Ministry too had been cleared, bringing down the number of blocks awaiting clearances from 47 to 39.

Sources said companies like Reliance Industries had already invested close to USD 16 billion in the 39 blocks since 2000 after getting approval from the Defence Ministry at every stage - first for beginning seismic survey, then for drilling wells and then for constructing permanent oil and gas facilities.

Oil Ministry officials insisted that Defence Ministry cannot withdraw the clearance after 12 years of exploration.

Blocks like KG-D6 were awarded to companies since 2000 by the Cabinet after clearance from all ministries concerned including the Ministry of Defence.

The reason for classifying the Krishna Godavari basin block KG-D6, where UK's BP Plc has 30 per cent interest, as 'No-Go' area is that it overlaps with a proposed Naval base.

Reliance Industries-BP's NEC block NEC-OSN-97/2 where sizable gas discoveries have been made, also has been classified as "No-Go" area as it is close to missile launching range/air force exercise area.

Sources said the other "No-Go" blocks are with ONGC and reasons cited for withdrawing clearance include being close to missile launching range, overlapping with proposed Naval base, overlapping with Naval firing range and Air Force exercise area.

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