CCI to consider approval to RIL's KG-D6, 46 other blocks

The newly formed Cabinet Committee on Investment is likely to consider tomorrow clearing 47 oil & gas blocks, including Reliance Industries' producing KG-D6 gas fields, where defence approval has either been withdrawn or withheld.

The Cabinet Committee on Investment (CCI), which was constituted to expedite the clearance for infrastructure projects of Rs 1,000 crore or more, is scheduled to meet for the first time tomorrow evening, official sources said.

On agenda is clearance to 47 oil and gas blocks.

The Oil Ministry wants CCI to relax stringent conditions that Defence Ministry has put for exploration in 32 blocks and clearance of 14 blocks which have been declared "No-Go" areas.

Sources said companies like RIL have already invested USD 15 billion in these blocks since 2000 and the Ministry of Defence has now withdrawn or withheld clearance to them.

Of the 47 blocks, RIL's KG-DWN-98/3 or KG-D6 block falls in 14 areas which the Ministry of Defence has declared as "No-Go". The reason for classifying the Krishna Godavari basin block, where UK's BP Plc has 30 per cent interest, as 'No-Go' area is that it overlaps with a proposed Naval base.

KG-D6, which was awarded to RIL in 2000 by the Cabinet after clearance from all ministries concerned, has been producing oil since September 2008 and gas from April 1, 2009.

RIL-BP's Mahanadi basin block NEC-OSN-97/2 where sizeable gas discoveries have been made, also has been classified as "No-Go" area as it is close to missile launching range/air force exercise area.

Sources said the other 12 "No-Go" blocks are with ONGC, Cairn India and Australia's BHP Billiton and reasons cited for withdrawing clearance include being close to missile launching range, overlapping with proposed Naval base, overlapping with Naval firing range and Air Force exercise area.

Besides the 14 "No-Go" blocks, the defence ministry has imposed stringent conditions in respect of 32 exploration blocks.

Sources said the stringent conditions imposed include companies not locating any pipelines or structures on sea surface in the blocks cleared for exploration and production activities.

Subsea/submerged permanent structures, if any, are to be located more than 100 meters below sea surface or outside the DRDO/Indian Air Force danger zone area (on sea surface) or Naval exercise areas, they said adding the conditions were impractical.

For one block, clearance has been denied by the Commerce Ministry.

Sources said the Oil ministry in the Cabinet note has argued that non-clearance of blocks will lead to disputes and may severely impact the future growth of the sector