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Defence Min objects to AP's oil-gas project in KG basin

Press Trust of India  |  Hyderabad 

Andhra Pradesh's plan of making a foray into the oil and natural gas sector seems to have hit a roadblock as the Defence Ministry has raised objections to two of the four blocks of Krishna-Godavari basin as they come under the ministry's missile testing range.

As a result, oil and gas major ONGC might have to give up two of its blocks- KG-OSN-2009/1 and KG-OSN-2009/2-in which ONGC holds 80 and 90% stakes respectively, while Andhra Pradesh Gas Infrastructure Corporation (APGIC) holds 10% in each block. The APGIC, along with ONGC and others won four blocks in the last NELP bidding.

However, fearing objections, the British Gas India (BGIPL), a member of the consortium, had written a letter to the Directorate General of Hydrocarbons (DGH) requesting it to procure a green signal from the Defence Ministry, before conducting a seismic survey in block- KG-DWN-2009/1. APGIC has 10% stakes in this block as well.

The KG-DWN-2009/1 block was jointly won by BG Exploration and Production India Ltd (30% as operator), Oil India Limited (15%), ONGC (45%) and APGIC (10%) in the NELP-VIII round.

However, since there was no response from the DGH, the BGIPL tried to approach the Defence Ministry directly, sources said.

"Though the Seismic survey has been conducted in these two blocks, in the absence of the Defence Ministry approval, the ONGC could not go ahead with the project," sources said.

A senior ONGC official said: "We might have to pay a hefty fine if we do not stick to the schedule."

According to a senior ONGC official, the defence officials have asked them to suspend work in the river basin during the aircraft exercises in the vicinity.

Meanwhile, the Defence Research and Development Organisation (DRDO) had also requested the oil ministry to restrict the operations at the KG Basin as it is close to its missile testing range. The oil ministry in turn requested the DRDO to shift the testing range to some other place along the coast

First Published: Wed, May 11 2011. 17:28 IST