Krishna-Godavari exploration hits a ‘defence’

The government’s attempt to sort out a shortfall in production of gas from the Krishna-Godavari (KG) basin faces a new hurdle — from the defence ministry.

At least two of four KG basin blocks allotted to developers in the eighth round of the New Exploration and Licensing Policy (Nelp) have remained untouched because of objections from the defence ministry.

The ministry has pointed out that the blocks fall within its missile testing range.

Though the preliminary seismic survey has already been done in the two blocks, the defence ministry is yet to give a final go-ahead for further exploration and development, a source said on the condition of anonymity.

ONGC, which has the mandate for developing the blocks, along with British Gas India and Andhra Pradesh government, is considering giving them up as it has not been able to take up the work because of the ministry’s objections, the source said.
  
British Gas had in fact taken up the issue with the Directorate General of Hydrocarbons (DGH), seeking its intervention in getting the defence ministry’s clearance.

“There seems to be no response from the DGH on the issue and British Gas is trying to take up the issue directly with the ministry,” the source said.

The ministry’s objections have come as a dampener for the Andhra Pradesh government’s plan to emulate Gujarat in making forays into oil & gas sector. After locking horns with RIL for priority allotment of gas to units in the state in 2009, the state government had decided to take a plunge into the sector by joining hands with developers. Now, with the development lagging the Nelp VIII schedule, the government is said to be worried about the penalties that could be imposed.