Reliance Industries Ltd (RIL) will surrender seven oil and gas exploration blocks. It had earlier surrendered 11 blocks.
NEW DELHI: Reliance Industries Ltd (RIL) will surrender seven oil and gas exploration blocks. It had earlier surrendered 11 blocks.
An RIL source said the company will surrender three blocks in the Kerala Konkan (KK) region it won during the first and second rounds of bidding under the New Exploration and Licensing Policy. The blocks are due for surrender, unless the government decides to give them research and development (R&D) status.
Surrender of blocks means that all investments made for survey work or for drilling wells would go waste, since it yields no result by way of oil or gas discovery.
“Exploration in these blocks is not viable,” said the source.
Addressing a session at the Sixth Petro India meet in New Delhi on Thursday, Reliance Gas Transportation and Infrastructure Ltd (RGTIL) vice-president EVS Rao said his company would surrender seven blocks and had earlier surrendered 11 blocks that span the west and east coasts and also on-land regions.
RGTIL is a fully owned subsidiary of RIL. Rao said that RIL plans to invest Rs 9,000 crore over the next two years in deepwater oil exploration business by 2009, besides infusing Rs 8,000 crore to meet minimum work programme commitments. The company has already invested Rs 9,000 crore on deepwater oil exploration, he added.
“Besides the three blocks which are being surrendered, the company has four blocks in the KK basin, which are not yet due for being returned,” said a company source. The four blocks were awarded in the third and fifth rounds of bidding.
The blocks in KK basin have, in the past, not seen aggressive bidding since they are not considered very prospective for discovering oil and gas.
In fact, the two blocks in KK basin did not attract any bid under the sixth round of bidding.
If R&D status is granted, it will open a new kind of exploration licensing in the country, since it will lead to suspension of development phases earlier committed by the company in the production-sharing contracts signed with the government.
In his presentation, Rao said exploration and production business in the petroleum sector was full of risks.
At present, 82% of the company’s Indian acreage lies in deepwater, where exploration is three times costlier than in onshore.
Currently, the company is evaluating seven oil and gas exploration blocks to surrender to the government, he said.
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