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RIL refuses to ink OilMin resolution over KG-D6 block

By Religare
RIL refuses to ink OilMin resolution over KG-D6 block
Reliance Industries Ltd (RIL) has refused to ink a petroleum ministry-sponsored resolution rejecting a revised investment plan for the main gas fields in the KG-D6 block, saying it did not reflect deliberations on the issue, said the media report.

The KG-D6 block oversight panel, headed by the directorate general of hydrocarbons, had on October 1 considered the reasons stated by RIL for lowering reserves in the producing Dhirubhai-1 and 3 gas fields in KG-D6 to 3.4 trillion cubic feet.

However, the DGH and the ministry nominee on the panel, called the management committee (MC), disagreed with the geological reasons put forth by RIL for cutting the reserves and the drop in production to 10 million standard cubic meters per day (mscmd), from 54 mscmd achieved in March 2010.

On the other hand, a resolution which means a decision taken at the MC meeting was sent to RIL and its partners, saying the panel had rejected the revised field development plan. RIL too circulated its version of detailed record notes or minutes of the meeting, sources said.

The DGH rejected the minutes, saying they did not "reflect the true proceedings of the meeting" but did not provide instances where they varied with the proceedings.

Sources said the DGH summoned an MC meeting last week to sign the resolution, but RIL refused to attend or sign it.

The Production Sharing Contract (PSC) states that MC meetings are convened by operators, not DGH or Oil Ministry.

The revised field development plan is critical in the Oil Ministry scheme of things to deny RIL the benefit of revised gas prices from April 1, 2014.

It is proposing to the Cabinet that the current rate of $4.2 per million British thermal units should be paid for gas from the D1 and D3 fields until it is proved that RIL did not deliberately suppress output. If the revised plan was to be accepted, it would have meant the ministry agrees with the reasons for the drop in output.


A revised investment plan for the MA field in the KG-D6 block, where output has dropped by 60 per cent has been accepted and it will get the benefit of the new gas price of $8.4 per million Btu, sources added.

Dion Global Solutions Ltd

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