Asserting that defence activities and oil and gas exploration could co-exist, Petroleum and Natural Gas Minister, Veerappa Moily on Friday said nearly Rs. 80,000 crore of investment in oil and gas would be unlocked soon as the Defence Ministry has shown positive signs to clear 32 blocks with certain stringent conditions.

Talking to the media in New Delhi, Mr. Moily said the ice had been broken with the Defence Ministry over the oil and gas blocks stuck with it for months. “We have broken the ice with them. I don’t think logjam continues. Oil and gas activities and defence strategies can co-exist,” he remarked. The Defence Ministry had classified seven blocks as no-go areas for oil and gas exploration and production and has imposed stringent conditions for another 32 blocks.

During its meeting on January 30, the Cabinet Committee on Investment (CCI) had asked the Defence Ministry and the Petroleum Ministry to sort out their differences on the issue within one month for the seven no-go blocks and within three months for rest of the 32 blocks.

“The clearance by the Defence authorities will clear up nearly 32 blocks and will unlock nearly Rs. 80,000 crore worth of investment. It will open up a big gateway of investment in the petroleum sector,” he added.

He said it was a common practice in several countries including the U.S. where defence concerns and oil and gas exploration co-existed. “The Defence Ministry has a concern, which we are also concerned about. National security is important but at the same time oil and gas exploration and development is also necessary. When country after country is going ahead, why can’t India?” he said.

Mr. Moily said lot of technologies were available where exploration can co-exist with defence strategies. Oil and gas production does not require thousands of square kilometres. While companies are allotted large areas for finding hydrocarbons, actual area used for production is only 4-5 per cent and the rest of it is relinquished, he added.

Originally, the Defence Ministry had declared 14 blocks as no-go areas as they over-lapped or were close to proposed defence sites. But the Defence Ministry later relented and agreed for exploration to be permitted in 7 blocks in Mahanadi basin. One more block which had previously objected to by the Commerce Ministry too had been cleared, bringing down the number of blocks awaiting clearances from 47 to 39.

Sources said companies like RIL had already invested close to $16 billion in the 39 blocks since 2000 after getting approval from the Defence Ministry at every stage — first for beginning seismic survey, then for drilling wells and then for constructing permanent oil and gas facilities.

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