Reliance Industries Ltd (RIL) on Tuesday got conditional approval to invest over a billion dollars to arrest the sagging output at its KG-D6 gas block.
The management committee (MC) that oversees the working of D6 on Tuesday decided to approve the annual operating and capital expenditure for fields pending for three years. It also conditionally approved the ‘declaration of commerciality’ for three finds in the block.
The above decisions had been made conditional to certain clarifications from RIL and partner BP under certain heads, said an official who attended the meeting. The committee has asked RIL-BP to drill more wells to confirm the three satellite gas finds: D29, 30 and 31 in the KG-D6 block.
RIL’s share price on the Bombay Stock Exchange on Tuesday rose to a monthly high of Rs 795.90 and closed at Rs 783.70, flat from the previous day.
RIL had in February 2010 submitted the Declaration of Commerciality (DoC) of the D29, 30 and 31 discoveries. But, the Directorate General of Hydrocarbons, which chairs the MC, rejected them, saying the contractor (RIL) had not done its prescribed test to confirm the discoveries.
Once the finds are declared commercial, RIL-BP would piece together an integrated development plan for the three finds together with 13 other discoveries.
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Petroleum Minister S Jaipal Reddy, who was not part of the MC meeting, stated before the meeting that RIL and partner BP would get conditional approval to develop finds in the Krishna-Godavari basin block. “Whatever the contractor needs technically, administratively to raise production, we will do. Approvals will be given subject to conditions,” he said.
The approval has come less than a month after the government had said the Comptroller and Auditor General (CAG) had recommended the withholding of sanctions to work programmes if the company did not facilitate CAG access.