The regulatory panel overseeing the performance of Reliance Industries prestigious D6 block in the Krishna Godavari basin on Tuesday approved the companys plan to develop four satellite fields at an estimated cost of $1.5 billion.
The oil and gas major is keen to develop the fields around their producing D1 and D3 fields in the D6 block as resources are scattered in different groupings.
By starting development work in these fields now, Reliance Industries and partners UKs BP and Canada-based Niko Resources hope to revive natural gas production by the year 2014.
BP officials recently said that the companies already have joint teams in place in the UK and Navi Mumbai looking at options to increase production from the D6 block, evaluating the potential to add production from other blocks such as NEC 25, and developing other exploration options.
The management committee for the block that includes officials from the company, the petroleum ministry and the upstream regulator the Directorate General of Hydrocarbons, which met on Tuesday to consider the development plan, has decided to approve the investment, sources privy to the development said.
While the companies and the regulator have signed the investment proposal, the oil ministry representative is expected to sign it in the next few days.
The committee has however, put a cap on the cost of developing the four fields that surround the currently producing Dhirubhai-1 and 3 (D-1 & D-3) fields in the D6 block. The cost cannot vary by more than 15 per cent, the committee said.