Justice A P Shah Committee last week opined that Reliance Industries should pay the government for the “unjust enrichment” by way of drawing natural gas from an adjacent block of ONGC in the KG basin of the Bay of Bengal since 2009.
While holding that RIL may have had prior knowledge of the fields of the two companies being inter-connected and gas migrating from one to another, the report also recorded RIL charge that ONGC knew of the connectivity way back in 2007 but choose to remain silent till 2013.
“ONGC had no knowledge about this earlier. As soon as we came to know about this we took action in 2013 (by approaching regulatory authorities). It seems that there is no mention our submission on this (Shah Committee) in the report. I don’t know what is the reason for that and why there is no mention of our submissions,” ONGC Chairman and Managing Director D K Sarraf told reporters here.
In submissions to the Shah Committee, “We had very strongly submitted that ONGC had no prior knowledge,” he said.
In the report, the panel had sought enquiry into the allegations of prior knowledge on the part of both RIL and ONGC, with particular emphasis laid upon the failure of both parties to present the information they had to the DGH.
Sarraf said the company spoke out in 2014 when the company apprehended that some portion of natural gas has flown from its fields to the adjacent KG-D6 block of RIL. “It was very tough statement to be made. It was made on the technical inputs.”
First the technical consultant D&M established that the reservoir between the blocks of ONGC and RIL are connected and then the Shah Committee also established that gas had indeed migrated or seeped.
But the Shah Committee stated, “The Government of India, and not ONGC, is entitled to claim restitution from RIL for the unjust benefit it received and unfairly retained. ONGC has no locus standi to bring a tortuous claim against RIL for trespass/conversion since it does not have any ownership rights or possessory interest in the natural gas.”
Sarraf said he was of the view that “it is difficult” to say at this moment whether ONGC has right over the compensation.
Asked how confident you are of getting government’s support on the issue when Prime Minister appeared in front page ad of Reliance Jio the very next day after Oil Minister said that government will take action on the Shah Report, he said, “These two things are totally unconnected.
“The current government is acting without any bias. They have no bias against any PSU or a private sector. They would definitely decide on merit. That is my firm belief. That is why they appointed a committee. This means that government means business,” he said.
He further said whether ONGC or the government would be paid will be “decided by the various stakeholders.”
“It is very difficult to say that whether ONGC or Government will get compensation,” he said.
The Shah Committee in its report noted and accepted the D&M Report findings that connectivity between the reservoirs in KG-DWN-98/3 (or KG-D6) block of RIL and ONGC’s KG-DWN-98/2 and Godavari PML blocks is established.
Since April 1, 2009, when RIL began production from KG- D6, to March 31, 2015, 7.009 and 4.116 billion cubic meters of gas had migrated from Godavari PML and D1 discovery of KG- DWN-98/2 block respectively to KG-D6. Of this 5.968 and 3.015 bcm of gas was produced from Godavari PML and D1 discovery of KG-DWN-98/2 block respectively, through KG-D6.
The report further said by January 1, 2017, 7.519 and 4.377 bcm of gas would have migrated from Godavari PML and D1 discovery of KG-DWN-98/2 block respectively to RIL’s KG-D6. Of this, 6.549 and 3.395 BCM of gas would have been produced from Godavari PML and D1 discovery of KG-DWN-98/2 block respectively through KG-D6.