All izz well in RIL’s wells?

While the government has approved RIL’s capital expenditure plan, it is still sitting over Cairn India’s plan for increasing production

Good sense and responsibility have played vital role in the steps taken by the Management Committee that oversees the operations of KG-D6 block, by conditionally accepting the annual budget, retroactively from 2010-11 for three years. Effectively, therefore, Reliance Industries (RIL) must show some tangible improvement in the next twelve months, so that work does not suffer again.
 
Petroleum minister, S Jaipal Reddy confirmed that “whatever the contractor (Reliance) needs technically and administratively to raise the production will be given, though such approvals may have conditions attached to them”.
 
The emphasis, therefore, has attached importance to increasing production from its current meagre level of 29 mmscmd (million metric standard cubic metres) from the 60 mmscmd it had achieved earlier.
 
Besides, if these steps are not taken, there is the inherent fear that the production may fall further down by 20 mmscmd by the next year.
 
It must be noted that, earlier, the Director General of Hydrocarbons had rejected the commerciality of three gas satellite finds of D 29, 30 and 31 but with this belated approval, RIL, BP and Niko will be able to go ahead with their proposed investment of $1 billion in their fields.
 
In a quid-pro-quo, Reliance has agreed to provide the Comptroller and Auditor General of India (CAG) access to records of the KG D6 block, which it had not provided earlier as a sequel to the adverse comments CAG had made earlier.
 
It is now hoped that RIL will now restart working in right earnest and raise the production levels to bring about much needed gas, at least to the 60 mmscmd level it had performed earlier, before reaching the original target of 80 mmscmd.
 
A passing reference may be made to the request that Anil Agarwal had made for the intervention of the prime minister to accord necessary permissions to facilitate increasing crude production by Cairn by an additional 175,000 barrels per day.
 
What is holding up the petroleum ministry in processing this request?

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at [email protected].)

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