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Foreign oil majors whine on space, defence hurdles

In what is seen as a new low for India's oil and gas exploration programme, major international oil and gas companies have expressed apprehensions about conducting exploration activities in India following restrictions imposed by the country's defence and space authorities. Anupama Airy reports. Speedbreakers

business Updated: Sep 20, 2011 02:02 IST
Anupama Airy

In what is seen as a new low for India's oil and gas exploration programme, major international oil and gas companies including global mining and energy major, BHP Billiton, UK companies British Gas and Cairn Energy and Canada's Canaro Resources have expressed apprehensions about conducting exploration activities in India following restrictions imposed by the country's defence and space authorities.

In a recent letter to the petroleum ministry, BHP and BP have together stated that it is becoming difficult for operators to make medium and long-term commitments in view of these restrictions. "This is also affecting the confidence of international companies in undertaking high-cost high-risk frontier exploration in offshore India," the two said in their letter dated September 2.

Cairn Energy India — which is conducting exploration activities on the eastern offshore---has gone to the extent saying that "The Ministry of Defence and Department of Space are proving to be nemesis for India's east coast offshore drilling." Speedbreakers

Cairn Energy, which is carrying out operations in the block PR-OSN-2004/1 said in its August 23 letter that around 40% of the area in block has been identified as restricted zone by the department of space and the main prospective area of the block falls in the restricted area, making it difficult for the operator to proceed.

BHP Billiton has also independently written to the ministry on August 29 about similar obstructions it is facing from the defence authorities in 11 oil and gas blocks being explored by it in India (secured under the NELP-VII and VIII rounds).

Asked to comment, a senior petroleum ministry official said, "The ministry has already taken up the issue with the authorities concerned, and that concerns from the defence and space authorities cannot be overlooked."

The companies argue that security clearances should have been obtained before offering the blocks and acreages for auction. "Such interference after we have made substantial investments is not acceptable," said a senior official of major global company.