India Soon to OK Rig Holiday for Deepwater Blocks

NEW DELHI (Dow Jones Newswires), Jan. 19, 2009

India's federal government is likely to give final approval soon for a rig holiday for exploration and production companies, giving them more time to explore their deepwater blocks, a senior government official told reporters.

The government is considering the rig holiday because due to a shortage of deep water rigs the companies have not been able to explore their blocks according to schedules written into production sharing contracts with the government.

The holiday will allow companies like Oil & Natural Gas Corp., Reliance Industries Ltd. and Italy's ENI SpA three more years to develop some of the blocks they have been awarded under the government's new exploration licensing policy.

"The committee of secretaries has recently approved the proposal. The rig moratorium will be effective from Jan. 1, 2008," the official said.

A total of 31 exploration blocks will benefit from the rig holiday, the official said.  

Copyright (c) 2008 Dow Jones & Company, Inc.

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