Reliance Industries Limited (RIL) got a boost from Cabinet Committee on Investment (CCI)‘s decision to clear the blocks of oil and gas production in KG-D6 basin located in Bay of Bengal. Earlier, the defense ministry had barred the areas along NEC-25 and KG-D6 blocks for exploration of oil and gas. It had opposed to any exploration activity happening near the area which would hinder the operation of the navy and the Air Force. About 60-70% of NEC-25 block fell under the 50 km radius of Chandipur missile launch pad and about the other half of it was within the danger zone of the Balasore air-to-air firing range of the IAF. In the NEC-25 block, there are already six new gas finds which have been made so far, but this area had to be cleared as it fell in direct range of the block nearest to the coast was relinquished i.e.the area at a distance of 100 km from Chandipur missile launch pad.
In total, there were eight blocks which fell in “no-go” zones as the area overlapped with a proposed naval base, missile launch and Air Force exercise area. The CCI after consensus from defense ministry has cleared five blocks which will now be ready to explore. The ban still continues for 31 exploration areas. The CCI has asked the defense ministry to terminate the contracts for these blocks. The reason behind this disagreement of the defense ministry was because the exploration and research activities could hamper surveillance and noise generated would affect the radars placed in the area occupied by the navy. So, these areas located near the naval bases were included in the “no-go” limit.
However, RIL has agreed to clear the 495 sq.km which fell under the “no-go” limit. The Navy will re-align its boundary to not to cause any hindrance in the activities of oil and gas.
This clearance comes as a relief when Mukesh Ambani led RIL was planning to deepen its reserves located in the KG-D6 basins by a mile so as to increase its energy output.
RIL had planned to invest more money for exploration of the reserves located near KG-D6 basins for more production of natural gas and oil. Since the government is on the way to reduce the import of crude oil, it is necessary for more natural gas and petroleum reserves to be discovered so that the country becomes self sufficient to balance the supply and demand ratio of crude oil. RIL along with its European partner BP is set to invest $5 billion in the next five years for increasing the natural gas and oil production found from the reserves of KG-D6.