Ministry refuses to buy Reliance’s gas output story

The petroleum ministry on Tuesday questioned the argument put forward by Reliance Industries on declining of gas output from it's most prolific KG D6 block.

While addressing the media at the economic editors conference, petroleum minister S Jaipal Reddy said he was not convinced with RIL's argument that geological complexity is sole reason for declining gas output. "We are not convinced and the DGH is also not convinced (on the geological complexity argument)," Reddy said.

The output has fallen to 26 million standard cubic metres a day (mmscmd) of gas from the D1 and D3 fields of the KG D6 block from the peak levels of over 60 mmscmd in early part of 2010.

The output from the block is expected to decline further and there is a fear that it might shut down by 2016 if the trend continues.

G C Chaturvedi, oil secretary said, " That is a fear (that fields would go dry). If it keeps coming down for a longer period, it would come to an end naturally."

Meanwhile, Reliance has been pressing the oil ministry to revise the price of gas but the government has virtually ruled out any revision of gas price before 2014.

"This is an issue to be considered by empowered group of ministers. As of now, we are not considering any increase in price of gas before 2014. However, the EGoM can re-visit the issue," Reddy said.

In 2009, an EGoM fixed $4.2/mmbtu as the price of the gas produced from the fields where production is faltering. The price was fixed for a period of five years and was supposed to come up for revision only in 2014.

ALSO READ

West Bengal cuts India's FY14 outlook

Defence ministry still waiting for nod to Plan outlay

PC keeps some GAAR sops out of Finance Bill

Hinduja Group buys Belgian media company Alfacam