RIL deliberately extracted gas, alleges ONGC

Don't want to miss the best from Business Standard?

Oil and Natural Gas Corporation (ONGC) has alleged Reliance Industries (RIL) in a “well-planned and deliberate strategy" produced nearly $1.4 billion worth of its gas past six years and demanded the Mukesh Ambani firm pay full compensation with 18 per cent annual interest.

RIL, in 2001 and again in 2007 had acquired seismic data to study hydrocarbon reservoir several hundred meters below the sea-bed, in its Bay of Bengal KG-D6 block and in the neighbouring blocks of ONGC, without knowledge of the state-owned firm, it alleged.

The data acquired by RIL established that the Dhirubhai-I and III (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, said in a written submission to the AP Shah committee looking into the gas dispute between the two firms. “RIL concealed and did not reveal the data to ONGC,” the company alleged. “RIL drilled its production wells at such locations (close to common boundary of the blocks) and with such angles so as to extract maximum gas from reservoirs falling under ONGC's blocks.”

When contacted, an RIL spokesperson said, “We deny all the allegations. We are confident of demonstrating we have worked absolutely within our entitlement and there has been no impropriety on our part whatsoever.” Quoting from the report of US-based independent consultant D&M, jointly appointed by RIL and ONGC to study gas migration between their blocks, the state-owned firm said 8.983 billion cubic metres (bcm) of the 58.676 bcm produced by D1&D3 fields till March 31, 2015, came from KG-D5 and Godavari PML.

“The study also established that a total of 11.125 bcm of gas from ONGC blocks has migrated to RIL block due to the production activity,” the company said adding RIL had drilled four wells — A5, A9, A13 and B8 close to ONGC’s blocks. “One well, B8, is as near as about 50 meters to ONGC’s block boundary. Well B8 and A9 are even inclined towards ONGC's reservoirs,” the latter said adding KG-D6 gas production in April 209 started with four wells drilled close to block boundaries of ONGC.

Stating that the "extraction of gas by RIL from ONGC's block has been the result of a well-planned and deliberate strategy by RIL and simultaneously as a result of several omissions on the part of DGH", ONGC demanded that the private firm needs to compensate it in "US Dollar together with interest at the rate of 18 per cent per annum for production from April, 2009."

The government had in December set up a one-man Committee under Law Commission Chairman A P Shah to look into acts of omission and commission and recommend compensation to ONGC whose natural gas from Bay of Bengal block had flowed to adjoining Dhirubhai-1 and 3 fields of Reliance Industries.