RIL hits bureaucratic wall, complains to Oil Secy

With bureaucratic red-tape threatening to derail its multi-billion dollar oil and gas hunt campaign, Reliance Industries has complained to Oil Secretary saying that even routine matters are stuck for review/approval for months.

Reliance Executive Director PMS Prasad wrote to Oil Secretary S Sundareshan listing out a long list of operational issues at its oil and gas producing and exploration sites that have not been given approval for months.

"Of late, we have been facing major difficulties in getting even routine proposals reviewed / approved," he wrote. "You will appreciate that such delays impact Production Sharing Contract (PSC) schedules for exploration, appraisal and development programmes."

He said the Management Committee (MC), which comprises of representatives of oil ministry, sector regulator DGH and the oil company, has not approved even the work programme of KG-D6 block, the area that houses the nation's largest gas fields, for the current fiscal.

"Some of the major issues that are still awaiting MC review / approval (include) the Work Programme and Budget (WP&B) for 2009-10 (revised estimate) and 2010-11 (budget estimate) for KG-D6," he wrote.

Normally, the WP&B for a year is approved at the beginning of the financial year but it has not been approved even though only two months are left in the fiscal.

Besides, "review of WP&B for 2009-10 (RE) and 2010-11 (BE) for other exploration blocks, approval of budget for pre -development activities for KG-D6 (and) approval of delivery point of condensate (produced from) KG-D6," Prasad wrote.

"Delays in review and approval are bound to have an adverse impact on PSC timelines," he said.

In the eight page annexure to his four page letter, Prasad gave a date-wise list of pending issues.

He said the role of MC, according to PSC, is "restricted to that of a review function."

"While we are willing to incorporate inputs from the DGH and provide them with all reasonable information and justification, we request that the distinction between the review and approval function of the MC is maintained and respected by all the parties," he wrote.

"Failure to maintain this distinction is resulting in situation where even routine review activities (such as work program and budget) mandated under the PSC take inordinately long time," he said.

As an example, Prasad cited the issue of Declaration of Commerciality (DOC) of four gas discoveries made by Reliance in KG-D6 block that has been pending since February last year.

"While we are committed to our contractual obligations, we request that government as a party to the contract continues to give full support to our operations.

"We do hope that the MCs work to facilitate the smooth conduct of petroleum operations both in letter and spirit," Prasad added.