Oil ministry to refer decision on RIL,Cairn proposals to cabinet

The ministry of petroleum and natural gas would likely refer a decision on proposals of Reliance Industries and Cairn India to drill exploration wells in already producing oil and gas fields to the cabinet.
While RIL's proposal involves drilling an exploration well on the flagging D1&D3 gas fields in the KG-D6 block to study reservoir characteristic, Cairn intends to drill new probes to boost output from the Rajasthan block to 300,000 barrels per day from 175,000 bpd at present.

According to official sources quoted by PTI, the ministry was in agreement with the operators in the matter of drlling of exploration wells in producing oil or gas fields for addition of extra reserves and increasing production life but it did not want to take a decision on its own.

The directorate general of hydrocarbons (DGH), the ministry's technical advisory arm, had only a few years back taken a view that exploration be barred within an area that had been delineated following discoveries for production of hydrocarbons.

A way out for the ministry was to frame a policy for exploration in a development area and to put it to the Cabinet Committee on Economic Affairs for approval, the sources said.

Globally, exploration is allowed in under production fields to keep adding new reserves for replenishing ones that were under production. In absence of rejuvenation, the fields would terminally decline from the day one of production.

This has been the practice in fields in Assam and Mumbai offshore.