RIL relinquishes another KG block; company has given up 15 blocks in 2 years

NEW DELHI: Reliance Industries and its partner BP have relinquished an exploration block in the prolific Krishna-Godavari basin after a commercial oil discovery because the director general of hydrocarbons (DGH) found that reserves were spread outside the block’s area, oil ministry officials said. RIL and BP also decided not to pursue exploration in another nearby block, where gas was discovered but it was not significant, officials said.

“The Dhirubhai-54 discovery in KG-D9 was made about two years ago, but operator did not submit declaration of commerciality due to poor prospectively,” a DGH official said. The oil ministry, Reliance and BP did not respond to ET’s queries. Since BP picked up 30% stake in RIL-operated 21 blocks two years ago, the partners have relinquished 15 blocks including the two in famous KG basin after discovering oil and gas.

Besides RIL, other operators such as ONGC and GSPC are in various stages of producing gas from blocks located in prolific KG basin. RIL had initially claimed that the Dhirubhai-36 oil discovery in the KG-D4 block was economically viable and had submitted declaration of commerciality but, it later decided to relinquish the bock after DGH said reserves of the discovered oilfield were falling outside the block’s boundary, officials said.

DGH is technical arm of the oil ministry. Industry experts say that India’s sedimentary basins are not highly prospective unlike the Middle East, making it necessary for the government to make the regulatory regime transparent and helpful to investors.

However, even Indian companies such as Reliance Industries and Cairn India, which have made the country’s biggest discoveries in decades, have complained about regulatory obstacles in their efforts to produce more oil and gas. RIL and BP now hold only six oil and gas blocks where they have made at least 40 oil and gas discoveries, oil ministry officials said.