In a surprise move, oil regulator DGH has rejected two gas discoveries made by Reliance Industries off the Orissa coast and has refused to approve budget on its prolific KG-D6 gas fields.
The Directorate General of Hydrocarbons (DGH) will not recognise two discoveries Reliance made in the NEC-25 deep sea block off the Orissa coast because tests done to confirm reserves were different from the ones recommended by the regulator, sources in know of the development said.
DGH lowered the in-place reserves in NEC-25 to 3.5 Trillion cubic feet from about 5 Tcf indicated by Reliance.
On similar grounds, DGH is likely to reject four discoveries in Krishna Godavari basin KG-D6 block where the regulator is yet to approve spending for 2010-11 and 2011-12.
DGH, which as per the norm has to approve exploration and production spending on a block at the beginning of the fiscal, has been holding back approval for Reliance's 2010-11 budget for KG-D6 for several months.
Reliance Executive Director P M S Prasad had last year highlighted the delays that have threatened to derail the company's multi-billion dollar oil and gas campaign to the Oil Secretary S Sundareshan but things haven't changed.
Sources said DGH has not yet approved expenditure already done on KG-D6 fields during 2010-11 and the budget for the current fiscal too is pending with it.
DGH, they say, wants the budget to be recast to include cost of drilling more wells on the Dhirubhai-1 and 3 gas fields - first of the 18 gas discoveries in KG-D6 that have been put into production, in the budget.
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