Guidelines needed on how and when to inform DGH

Vol 13, PW 1 (18 Jun 09) People & Policy

Hardy’s stinging rebuke to the DGH reflects a wider problem in the sometime turbulent relationship between operators and the Indian upstream regulator.

At heart is a simple question: when do you need DGH approval before publishing sensitive material Most operators abide by the PSC rule that all discoveries need to be first reported to, and endorsed by, the DGH before being made public as commercial discoveries. Any operator who ignores this rule is reprimanded, rightly so.

Less clear, and more confusing is whether third party technical reports such as Gaffney’s one for Hardy need DGH approval before they are made public. Sibal and the DGH appear to think they do, while operators like Hardy think they don’t.

“To carry out a technical evaluation by a reputable consultant, no approval is required from the DGH and it is a generally accepted petroleum practice,â€‌ writes Hardy in its letter to Sibal. “You should be aware that the report by GCA clearly stated the â€کbest estimated prospective resources’ and not â€کreserve estimation’, as painted by you.

If you could read the publication of the technical evaluation report on our website, you should have fully understood the disclosures made instead of castigating us based on newspaper reports. No discovery was reported.

â€‌ To say Sibal doesn’t understand there is a wider problem would be unfair. In his letter to Bhave, the upstream regulator repeats his well-rehearsed call for, “specific guidelines in establishing a system of governance regarding disclosures in the press.

â€‌ Hardy has already taken a first step in calming waters. During a meeting after the storm broke Hardy chairman Sastry Karra accompanied by Reliance exploration chief Ravi Bastia met Sibal and agreed that all future third party reports would be simultaneously delivered to the DGH so it is â€کkept in the loop’.

But is this a PSC requirement “No,â€‌ replies a source. “There’s no requirement in the PSC.

Hardy has checked that.â€‌ Would the problem end if it were a PSC requirement Many think yes.