Japanese KG 'invasion' cleared by defence ministry

Vol 16, PW 8 (01 Nov 12) People & Policy
     

India’s army was celebrated for thwarting imperial Japan in World War II.

More recently, its navy almost sank an investment proposal by Japan’s Inpex to take 26% at ONGC offshore deepwater block KG-DWN-2004/6, which lies in a missile testing range. That would not have been worth celebrating.

Happily defence ministry clearance for ONGC’s exploratory drilling programme at the block surfaced last week, allowing Inpex to get ready to sign the ‘farm-in’ agreement in Delhi on November 5, becoming only the second Japanese company after Marubeni to hold equity stake in an Indian E&P block. Negotiations continued over a couple of months until August when talks went into a tailspin over fears the block would be forever entangled in defence ministry red tape.

Peace broke out when in early October defence ministry clearance became imminent. ONGC’s board immediately approved the investment proposal and Inpex’s board approved it soon after on October 24.

ONGC is unfazed by a defence ministry condition that no permanent structures should be erected above the water surface to develop any discoveries. “We will do sub-sea completions and evacuate gas (or oil) through (underwater) pipelines if there’s a commercially viable discovery,” says ONGC.

Defence ministry clearances also mean ONGC can move deepwater rig Platinum Explorer to the 10,907-sq km NELP-VI block to drill the sole Phase-I committed exploration well to at least 5700 metres TD in water depths of 2900 metres. “Platinum Explorer will be mobilised to the well location this month so drilling can begin right away,” we learn.

ONGC (60%) shares KG-DWN-2004/6 with GSPC (10%), Hindustan Petroleum (10%), GAIL (10%) and Oil India (10%).