Oil Ministry forms panel to codify discovery-recognition norms

 Amid disputes over recognition of oil and gas finds, the Oil Ministry has formed a panel headed by the Director General of Hydrocarbons (DGH) to codify globally recognised industry practices for adoption in India.

Though Production Sharing Contracts prescribe the adoption of generally accepted international petroleum practices or standards, there have been disputes between the DGH and operators such as Reliance Industries over tests that should be carried out to confirm discoveries.

Many gas finds have not been recognised and could not be put into production because the DGH insists on a test that companies such as RIL and BP Plc of UK did not conduct because it is considered unsafe globally and no longer practised.

The Oil Ministry issued an order on December 27 forming a 'Standing Committee on Petroleum Industry Practices' under the DGH. The nine-member panel will "identify the areas requiring codification of GIPIP (Good International Petroleum Industry Practices)," the order said.

It will prepare national codes for petroleum operations and review them every two years for updating in line with evolution of international standards, the order added.

The committee will also comprise of the ministry's Joint Secretary (Exploration) and Advisor (Finance) as members. Besides, Adviser (Energy) in the Planning Commission, Joint Secretary in the Ministry of Environment and Forests, nodal officer for exploration in the Ministry of Defence and Oil and Natural Gas Corp Director (Exploration) will be members.

Two representatives of the Association of Oil and Gas Operators will also be part of the panel, the order said.

The committee may hire consultants to study international best practices and recommend suitable ones for the country.

"The Standing Committee shall complete the first exercise of codification within a period of three months," according to the order, issued with the approval of Oil Minister M Veerappa Moily. The panel's expenses will be borne by the DGH.

Officials said the DGH did not recognise several discoveries in RIL's Krishna Godavari basin KG-D6 block and North-East Coast block NEC-25 off West Bengal because the prescribed Drill-Stem Test was not done to confirm them.

KG-D6 discoveries D-29, 30 and 31, estimated to hold 350 billion cubic feet of reserves, can produce 5-7 million standard cubic meters a day.

In the NEC-OSN-97/2 (NEC-25) block, two finds D-32 and 40, holding 663 billion cubic feet of reserves capable of producing over 4 mmscmd, were not entertained by DGH.