After having witnessed incessant delays due to unavailability of drilling rigs, Reliance Industries and its partners have decided to seek an extension to the phase I exploration programme of its D3 block in the Krishna Godavari (KG) basin. The current approval for phase I drilling expired in June 2013.

The D3 (or Deepwater 3) block is a hydrocarbon block awarded to the company under the fifth round of New Exploration Licensing Policy (NELP) and is separated by RIL?s most prolific D6 block by yet another block ? D5.

While RIL is the operator with 60% stake in the block, BP holds 30% and Hardy Oil holds the remaining 10%.

According to the interim management statement of Hardy Oil released on Thursday, the partners have now delayed the recommencement of the drilling programme of the block till the first half of the calendar year 2014 and is mulling seeking an extension of the completion of drilling deadline.

?The joint venture is expected to apply for a 12-month extension of blocks exploration phase I. Exploration drilling is expected to commence in the first half of 2014 and the government of India?s review of the D3 declaration of commerciality (DoC) proposal will likely continue through 2013.?

This is a year?s delay in recommencement of the drilling programme as hardy, in its interim statement a year ago, had pointed out that the consortium plans to start drilling in the first half of 2013.

Under the phase I of the exploration programme the consortium was expected to drill six wells, out of which it completed drilling of four wells by 2011 with satisfactory hydrocarbon (natural gas) discoveries. However, due to unavailability of rigs, the drilling of the remaining two wells could not be taken up.

Now the company said on Thursday that one of the deepwater drilling rigs have already arrived in Indian waters and the next one is expected to arrive ?shortly?. This will help the company in recommencement of the phase I by 2014, however, this will require an extension of the drilling programme from the government.

RIL could not be contacted for any comments.

Currently, the consortium has undertaken ego-technical studies to assess the potential of the eastern area of the block. In fact the southwest portion of the block falls under a Defence Research & Development Organisation (DRDO) designated impact zone and hence RIL has initiated a dialogue with Directorate General of Hydrocarbons (DGH) and DRDO to clarify any conditions that may be imposed on the impact zone and agree to a way forward.

Analysts say this delay in drilling of D3 will not impact the production enhancement plan or output guidance of the company in the near term as they have not been attributing major value to D3 as the DoC for the same is still under review by the government.

?A revised proposal for the DoC for the Dhirubhai 39 and 41 natural gas discoveries, submitted in 2012, remained under review by the Government of India. The proposed development plan provides for a dry gas, sub-sea cluster development with the flexibility to add in additional wells and to include possible adjoining area of discoveries,? Hardy Oil said in the statement.

Situated in the KG basin on the east coast of India, the D3 exploration license encompasses an area of 3,288 square km, in water depths of 400 metres to 2,200 metres, and is located approximately 45 km offshore.

The minimum work programme for phase I of the licence ends in June 2013 and requires the drilling of six exploration wells. To date, four consecutive gas discoveries have been made via Dhirubhai 39, 41, 44 and 52 (KGV-D3-A1, B1, R1 and W1) exploration wells. The joint venture has acquired approximately 3,250 km2 of 3D seismic data over the block.