A day after the government warned Reliance Industries (RIL) and BP of withholding sanction for their work programme if it was denied access to their accounts related to the KG-D6 block, BP India went into damage-control mode.
The company refuted reports of a potential D6 production shut-in from RIL/BP operations in the east coast. In a press release late this evening, BP stated, “These statements are erroneous and misleading. We are working closely with the government of India and making all efforts to find technical solutions to improve production from the D6 block.”
A senior executive in one of the companies, however, told Business Standard BP wanted RIL to respond to the Comptroller and Auditor General (CAG). In a meeting with RIL and BP last week, the Ministry of Petroleum and Natural Gas had requested company representatives to make all records and accounts of the KG-D6 block available to the CAG, as provided for in the production sharing contract.
On July 13, RIL Executive Director P M S Prasad and BP’s region president and India head Sashi Mukundan met Petroleum Minister Jaipal Reddy and sought speedy clearances for four of the blocks (NEC 25, KG-D6 and two in the Cauvery basin) being operated by the two.
Gas output from KG-D6 block has been under pressure for more than a year. Both RIL and BP have alleged delay in approvals by the ministry resulted in the sharp fall in output. This week, output from the block fell to about 30 million standard cubic metres per day (mscmd). Next year, it is projected to drop to 20 mscmd.