Getting Government approvals is never easy, even though the energy behemoth, Reliance Industries, had managed to crack the process better than most corporates. On Friday, though, the company hit some unexpected red tape in the Capital, even as its top management was trying to allay investor worries over its drop in profits.
The oil and gas major found itself at the receiving end of the authorities, along with its partners — BP and Niko — in the D-6 block.
The company , which is currently producing around 34-35 mmscmd from D-1, D-3 and MA fields in the block (down from around 50 mmscmd and 40 mmscmd in March and December quarters of 2011), was seeking permission to survey the entire block.
The survey would help in submitting an integrated field development plan to enhance output. However, Reliance (the operator) and its partners have got permission to survey only a part. The management committee did not allow survey of D-29, D-30 and D-31 discoveries in the block on the grounds that commerciality of these had not been approved as yet. Though the survey will be undertaken, the results could be only partial, sources said.
Industry observers say the rationale for surveying the entire block was that deployment of a vessel for survey is expensive. The vessel mobilisation alone costs close to $15 million, add to this operating costs.
At the meeting, though the nominee of the Directorate General of Hydrocarbons was present, the Government nominees had not turned up; while Reliance and its partners kept waiting at the designated time. The industry grapevine says that higher authorities had to intervene for the committee meeting to be held late evening.
The meeting of the management committee — which oversees the operations of the block — was crucial as the partners were seeking a nod for surveying the potential of all gas discoveries made in the block, instead of a piecemeal approach.
Reliance expects to produce 27.6 mmscmd (20.2 mmscmd from D-1 and D-3, and 7.4 mmscmd from MA fields) in the current fiscal. Once the output from satellite fields in the block goes on stream, which is not expected before 2015-16, the company operator will be able to add another 30 mmscmd (at its peak) to the production.