New Delhi, March 20: The Cabinet Committee on Investment (CCI) today cleared Reliance Industries’ KG-D6 block and gas discovery area NEC-25 along with three other areas where the defence ministry had either barred oil and gas activity or placed stringent conditions.
In all, eight blocks were declared “no-go” zones for reasons such as overlap with a proposed naval base or being close to missile launching and air force exercise areas. Stringent conditions were placed on another 31 exploration areas.
The CCI, which had asked the ministries of petroleum and defence to sort out differences, cleared five of the barred blocks, official sources said.
However, two blocks of Oil and Natural Gas Corporation and one block of BG Group in the KG basin will remain out of bounds as they fall directly within the boundaries of a proposed naval base.
The CCI said the oil ministry would take steps to terminate the contracts for these blocks.
Explorers have already spent $13.4 billion on the 40 blocks and another $2.5 billion is likely to be invested in the next three to four years.
Reliance and its partner BP had recently announced an investment of $5 billion over the next three to five years to boost gas output from the KG basin, which fell to an all time low of 19.4 million metric standard cubic meters (mmscmd) of gas per day because of geological complexities.
Sources said 30 per cent of the 7,645 square kilometre KG-D6 block overlapped with the navy’s firing and exercise area.
The ministry of defence felt that any exploration and production activities near its naval base would hamper surveillance and noise generated from exploration activities would affect the sonar and radar functionalities.
RIL agreed to relinquish the 495 sq km that fell in the “no-go” area, following which the navy agreed to realign the boundary required for naval operations for its proposed base to allow oil and gas activities in the remaining block.
In the NEC-25 block, about 60-70 per cent area fell within the 50km radius of the Chandipur Missile launch pad and about 50 per cent of the block fell within the danger zone of the Balasore air-to-air firing range of the IAF.