Indian government to ask Reliance to give up 80% of D6 gas block

India will ask Reliance Industries Ltd to relinquish 80 percent of its east coast deepwater D6 gas block, including five discoveries, as the energy major has not adhered to timelines for developing the area, the oil secretary said.

"We are waiting for the oil minister's final order," Vivek Rae told Reuters on Tuesday, referring to the instruction telling Reliance to relinquish the discoveries in the 7,645 square kilometre D6 block.

The five discoveries within D6 are D4, D7, D8, D16 and D23. Rae said Reliance failed to submit reports on the commercial viability the five discoveries on time.

He said the relinquished area will be auctioned in subsequent licensing rounds. The relinquished area does not contain any producing fields.

Total reserves in these five discoveries in the Krishna Godavari basin are estimated to be 805 billion cubic feet, two sources with direct knowledge of the matter said. The sources declined to be named due to the sensitivity of the issue.

No decision has yet been taken on the fate of the remaining three fields in the D6 block -- D29, D30 and D31 -- which are estimated to hold about 350 billion cubic feet of gas reserves, Rae said.

He said Reliance had submitted commerciality declarations of the three discoveries on time but had not carried out the necessary tests.

A Reliance Industries spokesman declined to comment.

Natural gas output from the Krishna Godavari basin's D6 block, in which BP has a 30 percent equity stake, has declined to 14 million cubic metres per day (mmscmd) from 60 mmscmd at the end of 2010.

The companies have cited geological complexities for the fall in output, which has been in steady decline since 2010, while the oil regulator believes they failed to drill enough wells.

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