ONGC accuses DGH of not discharging its duty

Reliance industries had in 2001 and 2007 studied hydrocarbon reservoir below sea in ONGC's block without their knowledge

ONGC has charged upstream body DGH with not discharging its contractual and statutory duty properly that resulted in a controversy over migration of its gas to neighbouring block of Reliance Industries.

ONGC is seeking full compensation together with 18% interest for the $1.4 billion worth of gas that has travelled from its blocks to RIL over the last six years.

In its submission to the one-man A P Shah Committee looking into the gas dispute, Oil and Natural Gas Corporation (ONGC) said the Directorate General of Hydrocarbon (DGH) had "full knowledge of the additional data acquired by RIL and should have discharged its duty without waiting for ONGC to complain."

RIL had in 2001 and again in 2007 acquired seismic data to study hydrocarbon reservoir lying several hundred metres below the sea-bed not just in its Bay of Bengal KG-D6 block but also of neighbouring blocks of ONGC without the knowledge of the state-owned firm, it alleged.

The data acquired by RIL established that Dhirubhai-1 and 3 (D1&D3) gas fields in its KG-D6 block have a considerable extension into ONGC's adjoining blocks KG-DWN-98/2 (KG-D5) and Godavari PML, the state-owned firm said in its submission.

"DGH did not discharge its contractual and statutory duty and obligations properly," it said.

As a nodal agency for monitoring exploration blocks, DGH was "in a position to find out the extension of the gas field when RIL submitted its initial development plan (IDP) for developing D1D3 discoveries in 2004".

ONGC said when the IDP was submitted by RIL to DGH in 2004, "it must have given entire data revealing continuity of reservoirs across the block boundaries".

Staffed with expert petroleum professionals with vast experience in interpretation and analysis of geo-scientific data, "DGH should have been able to decipher from the IDP that the reservoirs are continuous and extend into ONGC blocks".

"Looking at the locations of the wells and their inclination towards ONGC's reservoirs, such professionals should have concluded the real and hidden plan of RIL, i.E. extraction of gas from ONGC's reservoirs. The authorities in DGH somehow overlooked such mala fide intentions which was apparent from the approved IDP," it said.

"It was incumbent on DGH to have exercised its powers or recommend to the government to exercise its power under production sharing contract (PSC) and directed RIL to collaborate with ONGC for efficient development and effective recovery of gas," the submission said.

The acquisition of data of ONGC's blocks and then concealment of the same besides "inaction on part of DGH to exercise its powers vested in it have resulted in direct loss of gas and resultant loss of resources/reserves to ONGC and to the nation", ONGC said.

RIL has denied any wrongdoing, saying it's "confident of demonstrating" that it had "worked absolutely within our entitlement and there has been no impropriety on our part whatsoever".