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Hindustan Oil Exploration Company updates on Dirok Gas Development Project
As updated earlier, Hindustan Oil Exploration Company Limited had completed Phase 1 of Dirok Gas Development and successfully tested the gas flow during last week of March 2017 and have been supporting Oil India Ltd., the Licensee of the block, to secure Petroleum Mining Lease (PML) as approved and recommended by the Government of India to the Government of Assam to commence commercial gas sales by May 2017.
The Assam State Board for Wildlife (SBWL) headed by the Chief Minister had recommended the project in full including all the wells. However, the Standing Committee of National Board for Wild Life (NBWL), Ministry of Environment and Forests, during its meeting held on 15 May 2017 while approving the overall project, imposed restrictions on oil and gas wells located within one kilometer of Wild Life Sanctuaries.
As the wells located within the 1 km area were drilled after submission of wild life management plan and duly approved by the appropriate authorities and this one kilometer restriction around Protected Areas were not part of any previous guidelines of Ministry of Environment and Forest, a representation is being submitted to the Ministry of Environment and Forests, for removal of this restrictive new condition. The representation of the Company is supported by the nodal ministry, Ministry of Petroleum and Natural Gas.
We expect that the matter will be placed before the Standing Committee of NBWL for reconsideration in the light of its wider adverse implications across all oil and gas producing wells located within 1 km of Protected Areas. All project activities of Phase 2 are on track. We have successfully drilled Dirok 5 well. After its ongoing testing and completion, the rig will commence drilling of Dirok 6 well. Due to this unforeseen development, we anticipate further delays in issue of PML to Oil India Ltd. and now expect to commence commercial gas sales only during July – September quarter, post review of our representation by NBWL.
We remain confident of resolving this issue with the support of Ministry of Petroleum and Natural Gas and reiterate our earlier guidance of exiting Q2 FY 2018 with a production level of 25 million standard cubic feet per day and a plant capacity to process 36 million standard cubic feet per day (equivalent to 1 million standard cubic meters per day). Shares of HINDUSTAN OIL EXPLORATION CO.LTD. was last trading in BSE at Rs.71.85 as compared to the previous close of Rs. 72.8. The total number of shares traded during the day was 64454 in over 560 trades. The stock hit an intraday high of Rs. 73.3 and intraday low of 71.7. The net turnover during the day was Rs. 4663687. Willie Roaf Jersey
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