Centre presses panic button
April 27: The petroleum ministry has called a meeting next week to decide what action should be taken in view of the falling output from Reliance Industries Limited’s (RIL) KG basin, D6 block. “We understand that the production of D6 is not as per the field development plan, and the matter is under examination by the directorate general of hydrocarbons (DGH),” the petroleum secretary, Mr S. Sundareshan, said. “We have had some meetings, but a formal one — in which the ministry, DGH, and the contractor (RIL) will be present — will take place next week. At this meeting, we will review the situation and take appropriate measures. After assessing the reasons appropriate action will be taken,” the petroleum secretary, Mr S. Sundareshan, said.
Mr P.M.S. Prasad, the executive director at Reliance Industries on Wednesday met officials at the oil ministry. Reliance had in 2006 won government nod to invest $8.836 billion in Dhirubhai-1 and 3 fields in the KG-D6 block after promising an output of 61.88 million cubic metres a day from 22 wells by April 2011 and 80 mmscmd from 31 wells by 2012. However, Reliance is pumping 28 per cent less gas than it should from the D6 block. RIL claims that the reservoirs in the block are more complicated than previously expected and that it is drawing up a plan to raise production.
On asked whether the government could impose a penalty on Reliance for not meeting the targeted output, Mr Sundareshan said: “Don’t come to an abrupt judgement because of the uncertain drops. Point is that it is difficult and we have to assess the reason of the fall.” The government has asked Reliance to stop natural gas sales to non-priority users like Essar Steel and petrochemcial plants. “Also reports are there that the decision in regard to reallocation of D6 gas is not being followed. This is not correct. The contractor has been told about the re-allocation last week. Now, the GSPA’s and other issues will need to be looked into,” said the petroleum secretary.
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