Reliance Industries has surrendered 14 blocks to the government after incurring Rs1,400 crore in unsuccessful exploration costs.
Under the New Exploration Licensing Policy (NELP) rounds the company had won 45 blocks of which it has surrendered 14 to the government as it could not find commercially recoverable oil and gas according to sources close to the company.
The company invested or Rs13,200 crore in oil and gas exploration and appraisal in the blocks but could make commercially viable discoveries in only two blocks-KG-D6 in Krishna Godavari basin and NEC -25 in Mahanadi basin.
According to sources RIL cannot hope to recover the Rs1,400 crores it spent on seismic surveys and drilling wells in the 14 blocks and it would have to be written off as lost investment.
Meanwhile, India's largest oil and gas licensing round drew a poor response with a total of 76 bids being received for 36 of the 70 blocks on offer.
With Reliance Industries abstaining from bidding for the 70 exploration blocks on offer in the eighth round of auction under the NELP, the only companies of note in the bidding were BHP Biliton of Australia, BG of UK and Cairn Energy besides ONGC, according to the joint secretary (exploration), ministry of oil and natural gas, D N Narasimha Raju.