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  1. Reliance Industries ‘guilty’ of taking ONGC gas: AP Shah panel

Reliance Industries ‘guilty’ of taking ONGC gas: AP Shah panel

Reliance Industries (RIL) and its foreign partners BP Plc and Niko Resources have been found “guilty” for taking out natural gas that belonged to ONGC by a panel headed by former chief justice of Delhi High court A P Shah, government sources told FE, on condition of anonymity.

By: | Published: September 1, 2016 6:37 AM
RIL did not respond to a query from FE. A BP spokesperson said, “We understand from media reports that Justice A P Shah Committee has submitted its recommendations to the Ministry of Petroleum and Natural Gas, Government of India.(Reuters)

RIL did not respond to a query from FE. A BP spokesperson said, “We understand from media reports that Justice A P Shah Committee has submitted its recommendations to the Ministry of Petroleum and Natural Gas, Government of India.(Reuters)

Reliance Industries (RIL) and its foreign partners BP Plc and Niko Resources have been found “guilty” for taking out natural gas that belonged to ONGC by a panel headed by former chief justice of Delhi High court A P Shah, government sources told FE, on condition of anonymity.

The panel, the sources added, also recommended “economic and legal” implications of the incident and RIL commercially selling natural gas that belonged to PSU explorer ONGC. It has also raised the issue of ONGC and upstream regulator Directorate General of Hydrocarbons (DGH) not taking action on the issue at an appropriate time. The report has considered legal, financial and contractual provisions while making its recommendations. It also looked into any “acts of omission and commission” on the part of all stakeholders including RIL, ONGC and the DGH, to the government.

When contacted, petroleum minister Dharmendra Pradhan said: “Hon’ble Justice Shah on Wednesday submitted a comprehensive report on the gas migration issue. He has given some observations on the D&M report also. Let me look into the details of the report. We have a time limitation of one month. By September 30, government would take appropriate action on this issue.” When asked if the report has confirmed that gas has migrated from the ONGC block to RIL, Pradhan replied, “Yes,” refusing to elaborate further. The minister also said that the report would “certainly” be put in public the domain after the ministry reviewed it.

In November 2015, a study by US-based consultant DeGolyer and MacNaughton (D&M) stated that as much as 11.122 billion cubic metres (BCM) of natural gas had migrated from ONGC’s 98/2 area to adjoining KG-D6 block of RIL in the Bay of Bengal between April 1, 2009 and March 31, 2015, which RIL commercially exploited. At current rates, this gas would worth Rs 8,000-Rs 10,000 crore.

RIL did not respond to a query from FE. A BP spokesperson said, “We understand from media reports that Justice A P Shah Committee has submitted its recommendations to the Ministry of Petroleum and Natural Gas, Government of India. BP is yet to receive the same. Our intent was and continues to be one of resolving the issue in line with well-established global practices.” D&M, which relied on the data being provided to it and without carrying out a new survey, opined that “the OGIP (original gas in place) and associated reserves that are located ‘off’ (RIL-Niko’s) KG-DWN-98/3 block have been included as possible reserves attributable to development of KG-DWN-98/3.” The consultancy firm, according to sources, also indicated that the reserves “off” the KG-D6 block could belong to KG-OS-IG, a pre-NELP nomination area of ONGC.

ONGC had moved the Delhi High Court alleging theft of its gas by RIL by way of drilling wells close to its block. The KG-D6 block started producing hydrocarbons in 2009. ONGC has not produced any oil or gas from its block. On September 10, 2015, the Delhi HC disposed of ONGC’s petition and directed the government to take a decision within six months after it receives a report from an independent panel.

Findings

Justice A P Shah finds RIL drilled gas that belonged to ONGC

Shah agrees with D&M report that established gas migration

D&M said nearly 11.1 bcm of gas migrated from ONGC to RIL area

Of this, RIL has commercially drilled nearly 8.2 bcm and sold it to customers

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