Reliance Industries, BP, Hardy Oil give up gas block in Krishna-Godavari basin

MUMBAI: Reliance Industries (RIL), along with partners BP and Hardy Oil, has surrendered its discovered gas block KG-D3 in the Krishna-Godavari basin due to operational restrictions placed by the defence ministry. The basin is estimated to contain 500 billion cubic feet of in-place gas reserves. Hardy Oil, the consortium partner, cited the uncertainty over long-term natural gas pricing in India as one of the other reasons for the decision as well as the government-imposed gas price being lower than expected.

The consortium led by RIL is expected to write down about Rs 1,400 crore invested in the block so far and the relinquishment of the block will release them from any further work programme liability, including any further financial liability related to unfinished minimum work programme penalties.

Hardy said that the access restrictions imposed in 2012 covered more than a third of the block, affecting exploration, development and production. Reliance has a 60 per cent stake in the D3 block in the Krishna-Godavari basin off India's east coast. BP has a 30 per cent stake and Hardy Oil owns the remaining 10 per cent.