DGH disallows Reliance gas discovery on technical lapse

In a surprise development, the oil sector regulator, Directorate General of Hydrocarbons (DGH), has disallowed a natural gas discovery made by Reliance Industries in the Krishna-Godavari basin. It said the Mukesh Ambani-run firm had failed to give prior notice for conducting tests to confirm the find.

Reliance had last month struck gas in the fourth successive well on the KG-DWN-2003/1 block, which lies close to its prolific D6 area in the Krishna-Godavari basin in the Bay of Bengal. The discovery in KG-V-D3-W1 was confirmed through a proper test, and the data collected was duly submitted to DGH for validation. However, the company erred in not submitting a 48-hour notice to the oil regulator before conducting the tests, sources said.

DGH on September 1 had written to Reliance saying “the operator (Reliance) did not give any notice to DGH for witnessing the said discovery. This is violation of Article 10.2 of the Production Sharing Contract. In view of this violation, the notified gas discovery (named Dhirubhai-52) in the KG-DWN-2003/1 block is not considered as a gas discovery.”