Dienstag, 9. November 2010

RIL, ONGC, ENI get 3-year drilling breather

NEW DELHI: The Cabinet Committee on Economic Affairs on Thursday approved a three-year moratorium, or break, on drilling in deep waters by explorers. The decision will help state-owned Oil and Natural Gas Corporation, Mukesh Ambani's Reliance Industries Ltd and Italy's ENI save acreages they otherwise would have had to give up for failing to complete minimum work commitments.

ONGC and Reliance could not complete the commitments they made to win acreages due to a shortage of deepsea drilling rigs in 2008. On their request, the oil ministry had moved the Cabinet for grant of a drilling holiday in late 2008 but a decision was deferred several times.

The moratorium would apply to 30 blocks, 16 of which are with ONGC, 13 with RIL and one with ENI. The drilling holiday will be effective from January 1, 2008, to December 31, 2010. The three firms can now meet their drilling commitments during the extended period.

ONGC chairman R S Sharma said but for the moratorium his firm would have had to surrender the blocks. "We had invested about Rs 8,000 crore in seismic surveys, data acquisition and interpretation and drilling of some wells in the 16 blocks. We would have lost all of this," he said.

Globally, explorers faced shortage of drilling rigs as countries stepped up their oil hunt in the wake of the surge in crude oil prices in 2008. Day-hire charges for a deepsea drill rig had shot up 250% between 2007 and 2008. But for the drilling holiday, the companies would have also faced huge penalties for not fulfilling their work commitments, which included drilling of a certain number of wells.

The proposal will be implemented immediately and the contractors (ONGC, RIL and ENI) will be asked to complete the drilling commitments during the moratorium period of three years. The CCEA did not approve a graded system of incentives and disincentives to reward and punish companies based on their performance during the period.



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Source: http://timesofindia.indiatimes.com/business/india-business/RIL-ONGC-ENI-get-3-year-drilling-breather/articleshow/6144918.cms

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