CCI clears five oil and gas blocks

CCI in its meeting yesterday considered eight blocks which the Defence Ministry had declared 'No-Go' areas

The Cabinet Committee on Investment (CCI) has given clearances to oil and gas activity in five blocks off the East Coast, majority of them belonging to Reliance Industries, an official statement said today.

 CI in its meeting yesterday considered eight blocks which the Defence Ministry had declared 'No-Go' areas for reasons like overlapping with proposed Naval base or being close to missile launching and Air Force exercise area.The blocks were declared 'No-Go' after several years of oil and gas hunt which led to more than two dozen discoveries and one of them, RIL's KG-D6 started production nearly five years ago.

The statement said CCI in its meeting held yesterday gave clearances to oil and gas exploration in five blocks - KG-DWN-98/3 or KG-D6, NEC-OSN-97/2 or NEC-25, KG-OSN-2001/1 (all of RIL), KG-OSN-2009/3 of Cairn India and KG-OSN-2009/4 of state-owned Oil and Natural Gas Corp (ONGC).

"Due to the clearances given in this meeting, the investment already made to the extent of USD 10.71 billion will be put to use and further investment to the extent of USD 0.6 billion is envisaged in the next few years," it said. The government expects much higher investment after discoveries are made in these blocks.

The three remaining blocks - KG-OSN-2005/1, KG-OSN-2005/2 of ONGC and KG-DWN-2009/1 of BG Group of UK "will remain NO-GO areas for the exploration and production activities due to national security considerations," the statement said.

RIL's KG-D6, which has been producing oil since September 2008 and gas from April 2009, was fully cleared for oil and gas activity with total area of 7,645 sq km reduced by 495 sq km to meet defence needs. Similarly, its NEC-OSN-97/2, where six gas finds have so far been made, cleared after the portion of the block nearest to the coast was relinquished and the remaining portion was found to be beyond 100 km from the Chandipur Missle launch of DRDO and Balasore air-to-air firing range of IAF.RIL's KG-OSN-2001/1 was also cleared but the block had already been relinquished by the operator. This block will now be put up for auction in next licensing round.

ONGC's two blocks and BG Group's one block would remain 'No-Go' areas as they fall directly within the boundary of the proposed naval base.The CCI decided that the Oil Ministry will take steps for termination of the contract.

For Cairn India's KG-OSN-2009/3 and ONGC's KG-OSN-2009/4 blocks, oil and gas activity was cleared in only one portion of the block as the rest was within the impact zone of IAF's Suryalanka Guided Weapon Firing Range(GWFR) and Machhlipatnam launch site.