D&M submits draft report on RIL, ONGC gas issue

US-based consultant D&M in a draft report has stated that at least 9 billion cubic meters of natural gas worth around Rs 9,000 crore may have migrated from ONGC's idling Bay of Bengal fields to adjoining KG-D6 fields of Reliance Industries.
DeGolyer and MacNaughton (D&M) on Friday submitted to the two firms as well as the Directorate General of Hydrocarbons (DGH) a draft report stating that ONGC's Godavari Block (known as G-4) is contiguous to RIL-operated Block KG-DWN-98/3 (KG-D6), officials said.
The parties will now get an opportunity to comment on the draft findings before D&M prepares the final report.

Officials said D&M is of the opinion that there exists one big gas resource several meters below sea bed which extends from G-4 to KG-D6.
DGH had erred in drawing the boundaries of the blocks by ignoring the seismic data on presence of the reservior and drew lines that bifurcated the reservoir rather than making it part of one block.
ONGC had in 2013 claimed that RIL had deliberately drilled wells close to the common boundary of the blocks and that some gas it pumped out was from its adjoining block.

Officials said D&M opioned that since ONGC had not produced a single drop of gas since making the discovery way back in 2002, some of its share of gas may have flown out of KG-D6 block.

RIL started production from KG-D6 in April 2009.
D&M believes at least 9 billion cubic meters of gas belonging to ONGC could have migrated to KG-D6 wells.
This gas at USD 4.2 per million British thermal unit price is worth USD 1.33 billion or Rs 8,675 crore.
Officials said D&M, which was jointly appointed by ONGC and RIL to find if the neighbouring fields are connected, is of the opinion that there is no unconnected area in G-4 -- i.E. There exists no independent gas reservoir in the ONGC block and all the resources are shared with KG-D6.
According to D&M, RIL had drawn 58.67 bcm of gas from the wells up to March 31, 2015, out of which at least 9 bcm may belong to ONGC.

It is likely to submit its report on the issue by next month. And as per the Supreme Court order the Oil Ministry will have six months from the date the report is submitted to decide if ONGC is entitled to any compensation from RIL.
Oil and Natural Gas Corp (ONGC) believes the KT-1/D-1 gas find in its Krishna Godavari block KG-DWN-98/2 (KG-D5) and G-4 Pliocene gas find in Godavari Block extend outside the block boundaries into KG-D6.
According to ONGC, RIL's D6-A5, D6-A9 and D6-A13 wells drilled close to the block boundary may be draining gas from the G-4 field while the D6-B8 well may be draining gas from DWN-D-1 field of KG-DWN-98/2 block.

D&M has established connectivity between G-4 and KG-D6 but has so far not said anything on connectivity with KG-D5, sources said.