Directorate General of Hydrocarbons (DGH) has submitted its observations regarding reduced Mimimum Work Program (MWP) for KG-OSN-2009/3 to the petroleum ministry. In a proposal submitted by CAIRN, it had mentioned that in the block KG-OSN-2009/3, 35 per cent area falls under “No Go Zone” which is approximately 700 sq. km. Of the remaining block area, only 40 per cent of the original contract area is feasible for proper and effective exploration campaign. Nearly 25 per cent of the block area includes the cleared area on both sides of “no go area” is operationally not feasible and hence may be taken over by the Government. In view of this, CAIRN had requested for reducing the MWP in proportion to the reduction in the operationally feasible contract area.
DGH in its observation has stated, that the original contract area of the Block KG-OSN-2009/3 is 1988 sq. km. The MWP commitment as per PSC is 7010 line km. API of 2D seismic, 1988 sq. km API of 3D seismic and drilling of six exploratory wells.
DGH mentioned that the proportionate reduction of MWP is proposed by Contractor due to non-availability of operational area within the block and not due to any technical reasons. As the “No Go Area” of 700 sq. km is not available to the operator and has therefore requested the reduction in MWP proportionate to the area not available. In this regard, DGH informed the ministry that the production sharing contract has no provision for reduction of Minimum Work Programme (MWP) on account of available reduced contract area of the block due to defence ministry or any other restrictions by government departments. DGH has recommended the ministry to take a view on the proposal considering these observations.
The block KG-OSN-2009/3 was awarded in NELP round VIII in June 2010 to a consortium of Cairn Energy India Limited (CEIL) and Cairn India Limited (CIL) with CEIL being the operator. The Petroleum Exploration License for the blolck was granted in August 2010. Currently. the block is in first exploration phase which will expire on August 04, 2014. Operator is yet to commence exploration activities in the block.