The government has initiated a probe into Reliance Industries (RIL) and Oil and Natural Gas Corp (ONGC) having knowledge as early as in 2003 of state-owned firm's natural gas flowing into adjoining fields of RIL in KG (Krishna-Godavari) Basin.
ONGC had in late 2013 stated that it suspects extension of reservoirs from its blocks in the Bay of Bengal into RIL's KG-D6. This was based on seismic data available to it at least since 2007. RIL, on the other hand, seems to have an inkling as early as in 2003.
"Government has decided that Additional Secretary in the Ministry of Petroleum and Natural Gas will conduct an enquiry into the acts of omission and commission on the issue of prior knowledge about the continuity of the reservoirs," Oil Minister Dharmendra Pradhan said on Wednesday.
In a written reply to a question in the Rajya Sabha, he said the government had constituted a Committee under Justice (Retd) AP Shah to look into the dispute of gas migration from ONGC's Blocks KG-DWN-98/2 and Godavari PML to RIL's Block KG- DWN-98/3 (KG-D6) in KG Basin.
"The terms of reference of the Committee also included consideration of the acts of omission and commission, if any, on part of the stakeholders including RIL, ONGC, DGH (Directorate General of Hydrocarbons) and the government and give recommendations on them," he said.
Committee has submitted its report, and its recommendations have been accepted by the government.
"The Committee, in its report, has observed that the 2003 Appraisal Report prima facie reveals that RIL had prior knowledge about connectivity and continuity of reservoirs, and did not bring the contents and findings of the 2003 Appraisal Report to the notice of DGH," he said.
Pradhan said the Report also notes that ONGC, on its part, also had some form of prior knowledge about possible continuity in 2007, but did not act promptly or with due diligence, and took up the matter only six years after it first obtained relevant information.
"The Committee believes that the allegations of prior knowledge on the part of both RIL and ONGC must be enquired into further, with particular emphasis laid upon the failure of both parties to present the information they had to the DGH," he said.
His ministry had on November 3 issued a notice to RIL, Niko and BP plc seeking $1.47 billion for producing in the seven years ended March 31, 2016, about 338.332 million British thermal unit of gas that had seeped or migrated from the state-owned ONGC blocks into adjoining KG-D6.
After deducting $71.71 million royalty paid on the gas produced and adding an interest at the rate of Libor plus 2 per cent, totalling $149.86 million, a total demand of $1.55 billion was made on RIL, BP and Niko.