India May OK Rig Holiday for Oil Cos Next Week

MUMBAI (Dow Jones Newswires), Jun. 19, 2009

India is likely to give more time to oil and gas exploration companies for drilling in their deepwater blocks as a shortage of rigs has delayed production schedules, an oil ministry official said Friday.

"The drilling moratorium issue is likely to come up in the next Cabinet meeting," the official told reporters.

The government has been considering a rig holiday as the companies haven't been able to adhere to the timeline written into their production sharing contracts with the government, mainly due to a shortage of rigs.

The extension is expected to give companies such as 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.

A total of 31 exploration blocks are expected to benefit from the rig holiday.  

Copyright (c) 2009 Dow Jones & Company, Inc.

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