Consultant's report will determine future course of action in ONGC-RIL gas case: D K Sarraf

Interview with Chairman and managing director, ONGC

The Delhi high court last week disposed of a petition by Oil and Natural Gas Corporation (ONGC) in a case where the state-run explorer had alleged natural gas from two of its blocks in the KG basin off the Andhra coast - KG-DWN-98/2 and Godavari PML - might have been exploited by Reliance Industries (RIL). The court has asked the parties to wait for the independent expert report to be given in October and allowed ONGC to approach the court again if the government does not act within six months of the submission of the report. During an media interaction following the 22nd AGM of the company, ONGC Chairman and Managing Director D K Sarraf spoke in detail about the case. Edited excerpts:

What is ONGC's strategy in this case? What happens in case the expert report establishes reservoir continuity?

We had an apprehension in March 2014 that some of the reservoir on our side might be extending to the block of Reliance side (G-DWN-98/3 or KG D6). And, some of the gas on our side might have been produced by RIL. The rest of the case you already know. The court has now decided. A consultant was appointed by ONGC and RIL together, under the guidance of the DGH (director general of hydrocarbons). That consultant's work is still on. That report is expected to come at some time in October. When the report does come, we would know whether our apprehension is right or not. In case our apprehension is right, the court has advised the government that they should take suitable decision within six months. So, now based on the consultant report, the government would take a decision.

Would you be willing to go for joint development in case the consultant report establishes continuity of reservoirs?

All of this will be putting the cart before the horse. We do not know what sort of report would come and what would be the government's view on the report, etc. So, all these things would need to be seen but whatever we decide will be in the interest of ONGC and the nation.

You won't be able to develop Cluster-1 unless this dispute is sorted out because the G4 discovery is part of Cluster-1. Is that correct?

There is no dispute. We had an apprehension that the two blocks have a reservoir with continuity. That matter is with the consultant which has been jointly appointed under the supervision of the regulator. Cluster-1's assessment of resources was done before this apprehension. And the results of the assessment came before the production from the other side started. Now, we do not know and we would need to see how much of reserves are there. All these facts would come from the consultant report. So, the report of the consultant is going to be a very important document to decide the course of action between us and Reliance as well as the future course of action on Cluster-1.

If the reservoirs are not found to be connected, your entire argument will fall apart...

We would need to see whether the reservoirs are connected or not. Today, it is unfair to say anything on this matter as an expert is looking into it.