Reliance, oilmin differ yet again

New Delhi, March 15: Mukesh Ambani-led Reliance Industries Ltd has offered to relinquish 55 per cent of the 7,645 square kilometre KG-D6 block in the Bay of Bengal, which is much less than the area that the oil ministry wants the company to contractually vacate.

RIL this week wrote to the ministry offering to relinquish 4,266 sq km of the Krishna Godavari basin block, sources privy to the development said.

The offer was made just as the ministry was readying an order asking India’s largest company to vacate some 5,970 sq km of area of KG-D6 block.

Contractually, oil and gas exploring companies are required to relinquish 25 per cent of the area in an oil and gas block at the end of first phase of exploration, which spans three years.

At the end of second phase, 50 per cent of the area is to be given up and by third phase, only such area is allowed to be retained where the company has made a discovery and is required for development and produc- tion of the same.

RIL and its partner Niko Resources of Canada were awarded the KG-DWN-98/3 or KG-D6 block in 2000. The threeyear phase one ended on June 7, 2003 while the two-year Phase-II exhausted on June 7, 2005. The third phase ended on June 7, 2007.

Sources said upstream regulator DGH in 2006 agreed to the RIL proposal of declaring the entire 7,645 sq km as discovery area, thereby allowing the company to retain the full area. The decision was ratified by a committee headed by additional secretary in the ministry and by the oil minister.

The DGH has reviewed the decision after sharp criticism from CAG and recommended the ministry that Mukesh Ambani-led Reliance Industries should be informed that an area of 5,970 sq km is treated as having been relinquished in the first instance.

Sources said the ministry had not yet served the relinquishment order on Reliance Industries.

Reliance IndustriesNiko have made 18 gas and one oil discovery in KG-D6 block. — PTI