'RIL knew about KG-D6 and ONGC block connectivity in 2003'

Reliance Industries knew way back in 2003 that its Dhirubhai gas fields in Bay of Bengal block KG-D6 will drain out natural gas from adjacent block of ONGC, regulatory filings by its partner Niko Resources indicate.
Canada's Niko had on April 6, 2004 filed with Toronto Stock Exchange an "Appraisal Report as of March 31, 2003 on Block KG-DWN-98/3 (KG-D6)" natural gas reserves it had commissioned from DeGolyer and MacNaughton (M&M).
In the report, D&M stated: "Development of the KG-DWN- 98/3 block will be capable of depleting the OFIP (Original Gas In-Place) on the KG-OS-IG block."
KG-OS-IG block lies adjacent to KG-D6 and belongs to state-owned Oil and Natural Gas Corp (ONGC) which had taken RIL to Delhi High Court in May 2014 alleging its gas had been produced by the private firm.

Under court directions, RIL and ONGC appointed D&M to study if the gas fields in their blocks are inter-connected.
The US-based consultant in its final report submitted in December 2015 stated that as much as 11.122 billion cubic meters of ONGC gas has migrated to Dhirubhai-1 and 3 (D1 & D3) field located in the KG-DWN-98/3 (KG-D6) Block of RIL.

The government thereafter appointed a one-man committee under A P Shah to decide on compensation to be paid to ONGC. The panel is to submit its report by next month end.
Niko, which holds 10 per cent stake in KG-D6 block, had in 2003 commissioned D&M report to understand viability of the gas discoveries made in the KG-D6 block in 2002.

"The OGIP and associated reserves that are located off the KG-DWN-98/3 block have been included as possible reserves attributable to development of the KG-DWN-98/3 block," D&M had said in the 2003 report. "The reserves associated with that portion of the OGIP would require a separate stand-alone development by the owner of the block (KG-OS-IG) which could prove cost prohibitive."
When contacted, RIL said, "We have already made our detailed submission to the Shah Committee regarding the filing made by Niko. It would be inappropriate to comment on the submission itself in deference to Justice Shah's instructions to the parties to maintain strict confidentiality."

Sources said while ONGC in its submissions to the Shah panel has pointed to the Niko filing to buttress its case, RIL told the panel that comments made in the Appraisal Report "suggest that there was a possibility of connectivity, but only that and is not firm evidence of it."
According to RIL, it was not until D&M undertook its detailed 14-month study and analysis (at a cost of over USD 2 million) and furnished the 2015 Report that reservoir connectivity was indicated.
It further stated that the Appraisal Report was in public domain since 2003 and ONGC "could have raised with RIL or (upstream regulator) DGH any issues that it felt required attention or discussion, that than 10 years later, as it did.