Red signal in exploration: BG abandons seismic survey plans

Energy companies British Gas (BG) and BHP Billiton had to drop their plans to conduct seismic surveys in oil blocks off the Andhra coast twice in the past 15 months, as the formal award of the blocks to the companies was delayed pending clearances from the defence ministry.

In a bid to take advantage of the weather window, the companies had prepared their seismic plans, said a person aware of the the development, requesting anonymity. However, they had to drop their plans as several technicalities delayed the award of the contracts.

BG, however, declined comment. “We will be in a position to comment after we get a clearance from the government on approval of the blocks,” said a BG spokesperson.

A consortium led by the BG Group had been identified as the qualifying bidder for an exploration block (MB-DWN-2010-11) off the west coast of India during the ninth edition of the New Exploration and Licensing Policy (Nelp-9). “The award of the contract is subject to final confirmation from the government of India and regulatory approvals,” BG, which owns 50 per cent stake in the consortium, says on its website.

Not only BG, but several other companies, including Santos Ltd, BHP Billiton, Eni Spa and BP Plc, are also awaiting either defence- or environment ministry-related clearances to start exploration in the blocks offered to them.

BHP Billiton holds eight blocks in a naval missile testing zone. The company is awaiting defence clearance for MB-DWN-2010 and MB-OSN-2010/2 blocks that were offered in Nelp-9.

According to details from the ministry of petroleum and natural gas, of 80 blocks, approval to 27 blocks are delayed pending clearance from the Defence Research and Development Organisation (DRDO), while 22 blocks are stuck in the defence ministry. While the environment ministry has not given approval to three blocks, two await clearances from the space department.

Besides, 10 blocks seek clearances from both the Navy and DRDO, while 10 others await a green signal only from the Navy. While maritime dispute with Bangladesh has held up the clearances for two blocks, four blocks await state government clearance.

Safety issues have blocked Italian firm Eni’s plans to drill exploratory wells in a deep-water block that it won in the Nelp-5. Drilling permission to the company is pending from the department of space due to the block’s proximity to a rocket launch zone (in Andaman and Nicobar Islands) of Isro.