Reliance Industries Ltd (RIL) will surrender seven oil and gas exploration blocks. It had earlier surrendered 11 blocks. An RIL source said the company will surrender three blocks in the Kerala Konkan (KK) region it won during the first and second rounds of bidding under the New Exploration and Licensing Policy. The blocks are due for surrender, unless the government decides to give them research and development (R&D) status.
Surrender of blocks means that all investments made for survey work or for drilling wells would go waste, since it yields no result by way of oil or gas discovery. Reliance Gas Transportation and Infrastructure Ltd (RGTIL) vice-president EVS Rao said his company would surrender seven blocks and had earlier surrendered 11 blocks that span the west and east coasts and also on-land regions.
RGTIL is a fully owned subsidiary of RIL. Rao said that RIL plans to invest Rs 9,000 crore over the next two years in deepwater oil exploration business by 2009, besides infusing Rs 8,000 crore to meet minimum work programme commitments. The company has already invested Rs 9,000 crore on deepwater oil exploration, he added. If R&D status is granted, it will open a new kind of exploration licensing in the country, since it will lead to suspension of development phases earlier committed by the company in the production-sharing contracts signed with the government.
In his presentation, Rao said exploration and production business in the petroleum sector was full of risks.
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