RIL To Get A Go- Ahead From The Oil Ministry For Its KGD6 Investment Plans
Filed Under: Business | Posted: 12/04/2012 at 9:48PM
Comments | Region: India
The Oil Ministry may soon approve RIL (Reliance Industries Limited)’s investment plans for the KGD6 block that it had prorogued earlier. This will enable the company to give momentum to the production of the KGD6 block by developing the satellite fields and its R- series wells. By carrying out these enhancement activities, the block is estimated to produce around 15 million cubic meters of natural gas by 2015-2016.
This green signal from the Oil Ministry came following RIL’s acceptance for the audit by the Comptroller and Auditor General of India (CAG), last Friday. The approval came at the right time when drilling in deep -water blocks are feasible, owing to calmness in the sea( weather – window). These activities, when effectuated, will pave way for an augmented water and pressure handling.
There are high chances the ministry may also approve its investment in the MA oilfield in the block and an investment of $1 billion to surge the output of the block. The company is sure to rejoice over the announcements, as these approvals were put on hold since 2010-2011.
These announcements manifest a renewed relationship between the company and CAG, where both the parties have decided to set aside their quarrels and work towards finding solutions. RIL has agreed to the audit by CAG’s audit of the KGD6 block as it will be conducted adhering to 1.9 of the accounting procedure of the production sharing contract (PSC).
With respect to the CAG audit, the company responded saying that it had embraced practices that were accepted internationally. It hit back saying that the company was determined to face any kind of interrogation or review provided a global expert with an understanding of the deep-sea fields, carry it out. It also clarified its stance mentioning that it was only subjected to a financial audit, as per the contractual obligation and not any extensive examination and scrutiny that the CAG has been mentioning.
In all, there have been eighteen discoveries that RIL has made including D1 and D3 that are the biggest among the lot.
The company seems poised to strengthen the production activities at these blocks, following the fresh set of investments that will take place.