Government disapproves RIL's $1 billion expense on KG-D6 gas fields: Oil Minister

Government disapproves RIL's $1 billion expense on KG-D6 gas
The congress led UPA government, which has been criticised for favouring country's largest business enterprise Reliance Industries (RIL), has denied USD 1 billion expense of company on the flagging KG-D6 gas fields for not implementing the approved field development plan.

In a written reply to a question in Rajya Sabha, Oil Minister MVeerappa Moily today said that government has disapproved the expenses of RIL after the company failed to properly execute the development plan.

"Government has not accepted the contention of the contractor (RIL) and have ordered proportionate disallowance of cost of production facilities amounting to USD 1.005 billion for not fully implementing approved development plan," Moily said.

"The average gas production from KG-DWN-98/3 (KG-D6 block) during the current year was about 29.81 million standard cubic meters per day as against 86.73 mmscmd approved in the field development plans for D1, D3 and MA fields in this block, which are currently on production," he said.

The Oil Minister said the output has fallen because one-third of the wells on D1 & D3 gas fields as well as on MA oil and gas field have ceased to produce due to water loading/sand ingress in wellbores. Adding to it, the company has not drilled the required number of gas producer wells in D1&D3 fields.

Read more about: reliance industries
Story first published: Wednesday, November 28, 2012, 9:30 [IST]
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