RIL’s plan for $1.53 billion investment in KG-D6 block rejected
02 Dec 2011
The ministry of petroleum and natural gas and its technical arm, the Directorate of Hydrocarbons (DCH), have rejected Reliance Industries' (RIL) plan to invest $1.529 billion for developing satellite fields around the KG-D6 block to offset falling gas output there.
RIL had submitted a fresh estimate of gas reserves in satellite fields of the KG-D6 block as also a cost assessment for developing the new discoveries.
The RIL proposal involved investments to the tune of $1.5 billion for raising gas output at the KG-D6 field by 10 million cubic metres a day.
The rejection of the proposal, which has been lying with the government for the last two years, comes after RIL slapped arbitration notice on the government over its attempts to disallow some of the expenditure incurred in the Krishna-Godavari D6 gas field in view of falling gas production. (See: RIL slaps arbitration notice on government)
The proposal for fresh investments was discussed by the block's managing committee comprising oil ministry officials and executives of Reliance Industries and its partner global oil major BP, sources said today.
At the oversight committee meeting of the KG-D6 block in New Delhi, the ministry and the DGH blocked the investment saying RIL and its partners, BP Plc and Niko Resources, need to rework financials as the original proposal was submitted in 2009, sources said.