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CoS suggests drilling holiday

NEW DELHI: A Committee of Secretaries (CoS) headed by the Petroleum Secretary, M. S. Srinivasan, has recommended a three-year ‘drilling holiday’ to oil and gas companies like Reliance Industries and ENI of Italy and State-run Oil and Natural Gas Corporation (ONGC) to tide over the problem arising out of global shortage of drilling rigs.

The CoS decided to extend a three-year moratorium to companies facing problem in the procurement of drilling rigs with effect from January 1, 2008, official sources said. The matter will now be placed before the Cabinet Committee on Economic Affairs (CCEA) for a final decision.

RIL, ENI and ONGC were among the companies that had written to the Petroleum and Natural Gas Ministry seeking relaxation in the commitment they had made for oil and gas blocks under the New Exploration Licensing Policy (NELP) due to global scarcity of drilling rigs.

With leading petroleum companies seeking a break from exploratory activity in the already awarded deep water blocks, due to continued shortage of oil rigs all over the globe, the Petroleum and Natural Gas Ministry had favoured such a break for these companies.

“I cannot comment on the findings of the CoS but we have received representations from a number of companies on the issue. I had promised that the Ministry will look at everything in a favourable manner in view of the adverse circumstances due to shortage of oil rigs all over the world,” Petroleum and Natural Gas Minister, Murli Deora said.

A committee under Mr. Srinivasan is also studying the issue of granting research and development status for NELP blocks in the Kerala-Konkan region. Other members of the committee include Economic Affairs Secretary, D. Suba Rao, Law Secretary, T. K. Vishwanathan and Director-General of the Directorate General of Hydrocarbons (DGH), V. K. Sibal.

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