1. Reliance Industries penalty: Ministry targets ONGC, DGH officials

Reliance Industries penalty: Ministry targets ONGC, DGH officials

The petroleum ministry is looking into lapses on part of officials at its technical arm, directorate general of hydrocabons (DGH), and ONGC responsible for gas migration debacle in the Krishna Godavari basin, where Reliance Industries (RIL) commercially exploited natural gas from PSU explorer ONGC’s adjoining asset.

By: | New Delhi | Published: November 11, 2016 6:34 AM

The petroleum ministry is looking into lapses on part of officials at its technical arm, directorate general of hydrocabons (DGH), and ONGC responsible for gas migration debacle in the Krishna Godavari basin, where Reliance Industries (RIL) commercially exploited natural gas from PSU explorer ONGC’s adjoining asset.

The government has slapped notices on RIL and its foreign partners — UK’s BP and Canada’s Niko Resources — seeking to recover from them $1.552 billion in the aggregate, for exploiting natural gas that migrated to their KG-D6 block from state-run ONGC’s adjacent asset.

“All stakeholders are being looked into as to what role they had played in those days,” said petroleum minister Dharmendra Pradhan.

Article 30.3 (b) of the production sharing contract empowers the government to terminate any contract if it founds that “any contractor has intentionally and knowingly extracted or authorised the extraction of hydrocarbon not authorised to be extracted by the contractor…” “This is an internal mechanism (of investigation). Whosoever is found responsible (for lapses) will be disclosed publicly,” Pradhan said.

ONGC was headed by R S Sharma and Sudhir Vasudeva and director (exploration) D K Pande when the PSU was carrying out exploration in these fields. On the other hand, DGH has headed by V K Sibal, S K Srivastava and then R N Choubey during that period. “It is not just ONGC, but also the (petroleum) ministry and DGH which is being investigated,” Pradhan reiterated.

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It was as early as 2003, when RIL came to know about the reservoir connectivity of its and ONGC’s block. However, RIL did not report the issue neither to ONGC nor to the government. Rather, RIL went ahead to commercially drill the natural gas that flowed into its block from the adjacent ONGC’s area.

Interestingly, DGH gave go-ahead to all the RIL drilling programmes not withstanding any migration of gas. In July 2013, ONGC for the first time wrote to the DGH stating that there was evidence of lateral continuity of gas pools of the ONGC blocks with the KG-DWN-98/3 block, operated by RIL. The private explorer initially had denied ONGC’s claim of gas migration.

The government’s move comes after a report by A P Shah, former chief justice of Delhi High court, presented to it on August 29, in which he agreed with the findings of US-based consultant DeGolyer and MacNaughton (D&M) on the issue of gas migration.

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