Govt denies clearances to 3 ONGC, BG Group energy blocks

Says area within boundary of a proposed naval base; could get alternatives

State-owned Oil and Natural Gas Corp (ONGC) and BG Group might  now have to surrender three energy blocks in the Krishna-Godavari basin, with the government on Wednesday refusing to give clearance because the blocks fall within the boundary of a proposed naval base.

The decision was taken at a meeting of the Cabinet Committee on Investment (CCI) on Wednesday. The ministry of petroleum and natural gas would consider allotting alternative blocks to the two operators. They would be allowed to recover the cost incurred in these blocks—KG-OSN-2005/1, KG-OSN-2005/2 and KG-DWN-2009/1—from any other one allotted to them.

Reliance Industries Ltd (RIL)'s KG-D6 block and the gas discovery area, NEC-26, along with most areas where the company had been either barred any oil and gas activity or put stringent conditions on, were among those that got clearance.

Stringent conditions were put for another 32 exploration areas. The committee discussed recommendations made by an official panel headed by national security advisor Shivshankar Menon and Pulok Chatterji, principal secretary to the prime minister.

RIL’s KG-D6 was fully cleared for oil and gas activity. Similarly, its NEC-OSN-97/2, where six gas finds have so far been made, was fully cleared with the “hold harmless” clause for any accidental debris, said sources. RIL’s KG-OSN-2001/1 was also cleared, but the block has already been relinquished by the operator.

CCI discussed the fate of seven oil and gas blocks, where production has been stuck due to objections from the defence ministry. In all, production is stuck in 39 oil and gas blocks because of disagreements between the ministry and oil companies.

In its first meeting in January, CCI had directed the defence and petroleum ministries to sort out the differences and come back to it within a month. Of the 39 contentious blocks, 32 got conditional clearance from the defence ministry, while there was some differences in the remaining seven, which CCI discussed on Wednesday.