Reliance wants to return two offshore Gujarat blocks

Vol 10, PW 23 (22 Mar 07) Exploration & Production

Reliance Industries has told the DGH it wants to return two offshore blocks in Gujarat because it can’t complete the minimum work programme for reasons beyond its control.

But the DGH wants Reliance to first pay penalties for the incomplete work programme. The two blocks in question are: SR-OSN-97/1, measuring 6860-sq km, and GK-OS/5, measuring 3750-sq km.

Reliance says on both blocks it has acquired, processed and interpreted more seismic data than committed in the minimum work programme, but has not yet drilled two committed wells, one for each block. SR-OSN-97/1 is a NELP-I block with Reliance holding 100%, while GK-OS/5 is a pre-NELP block, with Reliance holding 40%, Tullow Oil of Ireland holding 50% and Okland Oil of the US holding 10%.

Reliance blames lack of environment ministry clearance for its inability to drill the two wells. Block SR-OSN-97/1 sits near a marine park while GK-OS/5 is constrained by coastal regulations that forbid any permanent construction within 500 metres of the high tide line.

Both blocks won permission to shoot seismic but Reliance says it has not received any replies for the past four or five years to letters seeking clearance to drill. “In the absence of a firm â€کyes’ we take it as a â€کno’ for environmental clearance,â€‌ says a source.

GK-OS/5 extends from the shoreline into very shallow waters and the appropriate authority for Reliance is the Gujarat state government, “but they too have not replied to our requests to be allowed to drill.â€‌ Reliance is unwilling to wait any longer and, “would like to return the blocks.

â€‌ For GK-OS/5 the PSC was signed on 16th July 1999 but the PEL was received a year later. In July last year the exploration phase came to an end.

For SR-OSN-97/1, the PSC was signed on 12th April 2000 and the exploration period runs out on 11th April this year. Reliance sees no reason why it should be penalised for the unfulfilled work programme.

“It makes no sense that one arm of the government does not give us permission to drill while the other arm wants to penalise us for not drilling,â€‌ we are told.