Worried PMO asks why E&P sector going nowhere

Vol 15, PW 25 (28 Jun 12) People & Policy

Prime Minister Manmohan Singh’s office has sharply criticised the oil ministry for the worrying decline in E&P activity in India.

PETROWATCH learns PMO joint secretary BVR Subhramanyam summoned oil secretary Girish Chaturvedi and the new DGH director general RN Choubey on June 14 to explain why investment in oil and gas exploration is falling away. Subhramanyam demanded to know why only six of 108 discoveries in the nine NELP rounds since 1998 are producing: D1, D3 and MA at Reliance’s KG-D6 block; the Bheema and NSA discoveries at the Niko Resources-operated 419-sq km NELP-II onland block CB-ONN-2000/2; and the Ingoli field at NELP-VII block CB-ONN-2000/1, shared by GSPC (50%) and GAIL (50%).

Just days before, the PMO sent a note to Chaturvedi with Planning Commission queries on the E&P decline. “Due to non-compliance (sic) with government timelines, more than 90 discoveries are lagging,” says the PMO note.

“Discoveries must be quickly appraised or the area should be relinquished.” Subhramanyam said he holds the ministry directly responsible for failing to remove red tape and highlighted a drop in seismic surveys over the years: only 1550-sq km 3D was shot in India in 2011-12, against 31,679-sq km 3D in 2006-07.

Contacted by this report, an oil ministry official dismisses any suggestion E&P investment is falling, saying oil companies spent $2.294bn in 2011-12 against $1.168bn in 2006-07. “It is obvious 3D survey volumes have fallen but this is because there is less area left to survey.

” Most major offshore blocks were awarded by the time NELP-IV concluded, he adds, and have already been covered by seismic surveys.