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Oil rig shortage may delay projects

NEW DELHI: With leading petroleum companies seeking a break from exploratory activity in the already awarded deep water blocks, due to continued shortage of oil rigs all over the globe, the Petroleum and Natural Gas Ministry has worked out a proposal for granting a “exploration holiday” after seeking necessary approval from the Cabinet.

“We have received representations from a number of companies on the issue and are in the process of taking a decision. An Empowered Committee of Secretaries will decide on the issue and the matter will be placed before the Cabinet for final approval. The Ministry will look at everything in a favourable manner in view of the adverse circumstances due to shortage of oil rigs all over the world,” Petroleum and Natural Gas Minister, Murli Deora, said.

An empowered group, under the Petroleum Secretary, M. S. Srinivasan, is also studying the issue of granting research and development status for NELP blocks in the Kerala-Konkan region. Other members of the committee include Economic Affairs Secretary, D. Suba Rao, Law Secretary, T. K. Vishwanathan and Director-General of the Directorate General of Hydrocarbons (DGH), V. K. Sibal.

Reliance Industries Limited (RIL), Italy’s ENI and other exploration and production companies have made several representations to the Petroleum Ministry seeking a three-year break from drilling exploratory wells.

RIL had cited a global shortage of rigs for seeking a time out, a move that could give the company a breather against penalties for falling short of the work target promised to the government. The company has stated that a global shortage of rigs was hurting its deepwater exploration plans, although its main projects, such as the development of a huge gas field off India’s East Coast were not affected. RIL had stated that it expected the rig shortage to ease after 2011, when about 40 deep-water drilling rigs were expected to hit the market.

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