Reliance EIA poses test for Timor-Leste Government

Reliance's block is the orange area at top right.

Last June, the Indian oil company Reliance presented Timor-Leste with a draft Environmental Impact Statement and Environment Management Plan for a deep-water test gas/oil well they hope to drill in Block K of Timor-Leste's exclusive maritime area next month. La'o Hamutuk made a submission, urging the National Enviromental Directorate (DNMA) to reject Reliance's draft until the company makes significant revisions.

Following a meeting last month with Government, civil society and other stakeholders, Reliance responded to comments by La'o Hamutuk and others,  and submitted a somewhat revised version of their EIS and EMP, which DNMA is currently deciding whether to accept. Reliance has also announced that the well will be drilled by Transocean's Deepwater Frontier drilling ship.

This is the first time Timor-Leste's Government has had to decide on approval of an oil well in Timor-Leste's exclusive area, and it is a critical test which will set the precedent for future oil and gas projects. We hope that environmental professionals in regulatory agencies will make their decisions based on technical realities to protect Timor-Leste's interests, and not on political or personal loyalties.

La'o Hamutuk has posted a new web page in English and Tetum, with historical and technical information and links to documents about this project. The following is an abridged version of the text on that page:

In 2006, Timor-Leste signed Production Sharing Contract S-06-06 with Reliance Industries Limited, for "Block K" at the eastern edge of Timor-Leste's exclusive area. Reliance was the only bidder for Block K.

La'o Hamutuk has compiled several media articles about this project, covering the initial contract award, selling 25% of the joint venture to, preparations for drilling, and recent problems with another Reliance/Transocean project.

After conducting a seismic survey in 2008, Reliance requested Expressions of Interest from drilling contractors in 2008 and 2009. They began to plan Exploratory Drilling, including a 4,000 meter deep test well 112 km south-east of Timor-Leste. In mid-2010, they awarded the contract to Transocean, using the drillship Deepwater Frontier which has worked for Reliance in India.

In June 2010, Reliance submitted a draft Environmental Impact Statement and Management Plan to Timor-Leste's government for exploratory drilling, which the Directorate for the Environment (DNMA) circulated for public comment. La'o Hamutuk's submission concluded that we "do not believe that this EIA demonstrates that Reliance understands the risks, takes the responsibility, and has the capacity to conduct this exploration for the benefit of Timor-Leste’s people. Therefore, we urge DNMA to reject this plan,..."

Two months later, Reliance wrote responses to La'o Hamutuk and other submissions, although they have not yet received approval from DNMA. Nevertheless, they hope to mobilize the Deepwater Frontier on 19 September, and to begin drilling in October.

The Reliance exploratory well will be drilled by Transocean, the same company involved in the BP disaster at Macondo in the Gulf of Mexico. In May 2010, technical problems forced Reliance to suspend drilling with the Transocean Deepwater Expedition rig at the KGV-D3-W1 exploration well in India.

Although the Reliance well in Block K is smaller diameter than the Macondo well and does not plan to extract gas or oil, it involves similar water and drilling depths. This summary of the similarities and differences between the two projects shows the importance of effective regulation and operation in preventing future disasters.