Oil minister Jaipal Reddy has pledged conditional support for Reliance Industries' plans to increase gas output even as a state-controlled panel approved the budget for the KG-D6 block,in a sign of improvement in the thorny relationship between the ministry and the company.
The government-led management committee (MC) of the Reliance-operated block approved the budget for KG-D6 for the past two fiscal years, which was pending for a long time, and approved the $1.06-billion expenditure for 2012-13. Industry officials said the delayed budget approval would hurt output from the block.
"Whatever contractor needs technically, administratively to raise production, we will do," Reddy told reporters while the MC meeting was in progress.
Reliance executives were positive during the meeting and RIL president and COO B Ganguly told reporters that the meeting was very positive.
The committee, headed by director general of hydrocarbons Rajiv Nayan Choubey, also gave the green light to Reliance and its partner BP to develop three other gas fields in the same block with the proviso that the operator would be able to recover the costs only after extensive appraisal of these discoveries to formally establish commercial viability, government sources said.
The government appeared to have softened its stand after RIL agreed to share D6 accounts with the Comptroller & Auditor General (CAG) of India, which was first reported by The Economic Times on Monday.
According to officials, MC had not yet approved the declaration of commerciality (DoC) of D-29, D30 and D31 gas discoveries due to technical reasons but expressed willingness to give the company time to resolve the issues raised and to allow it to develop the fields.