Only nine-month extra for Reliance at MB-OSN-97/2

Vol 7, PW 12 (27 Aug 03) Exploration & Production

Reliance has lost an appeal for a year's extension to its 'Phase-I' work programme at NELP-I block MB-OSN-97/2 near the Mumbai High.

Instead, it will have to make do with a nine-month extension. During the three-year 'Phase-I' at this offshore Mumbai block, Reliance committed to reprocess 1,000-km old 2D seismic; acquire, process and interpret 1,000-km fresh 2D; and carry out technical assessment and geological modelling of 3,000-km 2D, well logs and other geological and geophysical data.

Yet its actual performance has far exceeded its commitment under the PSC. We learn Reliance has reprocessed 1,581-km old 2D; acquired, processed and interpreted 1,483-km fresh 2D as well as 414-sq km 3D seismic.

Reliance also began drilling an exploratory well (even though it had not committed to do so in 'Phase-I') to "test the prospects and leads that had been seismically delineated." More, we learn Reliance spent $5.96m on the block till 31st March, far in excess of its PSC commitment of just $490,000. The DGH admits government red tape is responsible for delay in Reliance's work programme because the PSC was signed on 7th June 2000 but the crucial Petroleum Exploration Licence was issued only four months later on 14th September 2000.

Officials also admit that Reliance's operations were hampered by the geologically complex nature of the block - located southwest of the Mumbai High platforms and to the east of the Kori Comorin Ridge - and the "non-availability of highly specialised 2D and 3D seismic vessels." Sympathy also extends to the fact that, "very few rigs are available to drill at the high temperatures and pressures" on this block. Despite this, the oil ministry, on DGH advice, has awarded Reliance only a nine-month extension beginning 7th June.

Expectations are high from this block because it lies close to Mumbai High with its "proven petroleum system" and the DGH predicts a "reasonable sized hydrocarbon discovery."