Moily backs Reliance in DST dispute with DGH

Vol 17, PW 16 (27 Mar 14) People & Policy

Veerappa Moily is accused by the media and politicians of giving Reliance special treatment.

Undeterred, the oil minister is backing moves to grant Reliance a one-year extension at KG-D6 to confirm its D29, D30 and D31 discoveries through Drill Stem Tests (DSTs), a longstanding DGH demand. As a precaution, Moily has asked DGH chief BN Talukdar to re-examine the draft proposal before it goes to the cabinet committee for approval.

The ministry had prepared a draft note last December 2013 based on comments by Talukdar’s predecessor RN Choubey saying Reliance should be allowed to conduct the tests. This however was rejected by Moily in February.

Moily feels the first note gave the wrong impression, that the government was giving “special dispensation” to Reliance rather than simply following precedent. “We hope to submit our (revised) draft to the ministry by end-March,” confirms a DGH official.

“We're identifying cases where ONGC and Oil India were given similar special treatment. Moily wants Reliance treated equally with national oil companies.

” He also wants the DGH to clarify if DSTs are mandatory at deepwater blocks. “I would like the new DGH chief to examine the whole matter afresh,” writes Moily on February 17, “and submit his opinion before the draft note is finalised.

" Reliance believes the three discoveries hold combined recoverable reserves of up to 400bn cubic feet of gas and can produce 7m cm/d for four years.