Hardy set to collide with DGH again over PY-3

Vol 15, PW 11 (01 Dec 11) Exploration & Production

UK-listed Hardy Oil & Gas is holding back on submission of a Full Field Development Plan (FFDP) for its PY-3 field until its Phase-III development plan is approved.

PETROWATCH learns DGH director general SK Srivastava wrote to Hardy on November 12 asking for a FFDP for PY-3, where oil production has been suspended since July 30, but where Hardy continues to ‘flare’ up to 60,000 cm/d of ‘associated gas.’ Srivastava attacked the PY-3 consortium once again for its ‘cosy relationship’ with Chennai-based Aban Offshore, accusing it of paying an overly “high” day rate of $87,500 for Floating Production Unit Tahara and Floating Storage and Offloading Unit Endeavor.

Srivastava labelled Hardy as “careless” for not monetising the associated gas it has been producing at the block for over a decade. Hardy has yet to reply to Srivastava’s letter.

Defending Hardy, a source tells us the company can submit a FFDP only after incorporating data from the two wells proposed in its blocked Phase-III development plan. Hardy submitted this carefully thought-out plan in March but was shocked when it was not approved by two government nominees on the PY-3 Management Committee, one from the oil ministry, the other from the DGH.

Hardy wants the DGH and the oil ministry to withdraw their objections so it can drill wells PD-5 and PD-N to collect data. It is also believed to be collecting data from wells PD-6, PD-7 and PD-8, which might be incorporated into a future FFDP.

“How can Srivastava accuse Hardy of being careless by flaring gas” wonders an observer. “If it was careless, why didn’t the DGH ever object to its previous development plans” He defends Hardy saying no one ever thought the field would continue producing gas for such a long time, or that oil production would last as long as it has.