Conditional defence clearance for oil & gas hunt in 59 blocks

After protracted delays, the defence authorities have cleared beginning of oil and gas hunt in 59 offshore areas but with the stringent condition that no permanent structures will be built above sea level.

As many as 77 blocks awarded since 1999 in various rounds of New Exploration Licensing Policy (NELP) to companies like ONGC, Cairn, Reliance Industries, BP and Australia's BHP Billiton were stuck for want of defence clearances as they either lay in path of Naval exercise zone or fall near the missile testing range.

After several rounds of discussions, the Ministry of Defence and DRDO a few weeks back have given conditional clearance to 59 blocks, top government sources said here.

The clearance is conditional to the companies not putting any permanent structure above the sea level, a pre-requisite which the explorers find difficult to abide by.

Sources said when oil or gas is discovered, permanent structures like manned-platforms have to be built above sea to aid hydrocarbon production.

While it is possible to put up sub-sea facilities necessary for a well to begin production and lay several kilometers of under-sea pipelines to transport oil or gas to a production platform in an area that is not objected by the Defence Ministry, it is a very expensive proposition.

Oil Secretary G C Chaturvedi, sources said, informed the Prime Minister's Office of the reservations of the explorers at a meeting convened by Principal Secretary to the Prime Minister Pulok Chatterji on September 24.

It was decided at the meeting that the Chaturvedi would meet Defence Secretary and Naval Authorities soon to ensure that a solution is found to the issue without further delay and exploration activities are started, they said.

Sources said of the total 77 blocks which had clearance related issues, only 18 remained to be cleared. Primary among these 18 blocks are 6 blocks in Mumbai Basin (both offshore and onshore) which were not cleared by Navy and another 5 on the East coast.

These areas are expected to be highly prospective for discovery of hydrocarbons due to their geological situation.

The government had in nine rounds of NELP has awarded 254 blocks to domestic and overseas explorers. Of these, 57 blocks are stuck for want of clearances, hurting the nation's plan to expedite exploration of oil and gas to cut its ballooning import bill.

Among the blocks stuck for want of defence clearances, 22 belong to state-owned Oil and Natural Gas Corp (ONGC) and 15 are with Reliance Industries.

Australian BHP Billiton's five blocks, three of Cairn India, two of Santos International and one each of British Gas, BP, Focus Energy, ENI of Italy and Jubilant Oil and Gas are also stuck.