D&M report: Oil min to probe if RIL flouted norms

By: | Published: December 3, 2015 1:52 AM

Consultant established underground reservoirs of adjacent blocks of ONGC, RIL are connected

In the light of the final findings submitted by US-based consultant DeGolyer and Mac-Naughton (D&M), establishing that underground reservoirs of adjacent oil and gas blocks that belong to state-run ONGC and privately-held Reliance Industries Ltd (RIL) are connected, the petroleum ministry will find out if the Ambani-led firm had violated any rule defined in the relevant production sharing contracts (PSC) or the Indian Penal Code (IPC), sources said.

Senior officials in the petroleum ministry overseeing the issue told FE that the Directorate General of Hydrocarbons (DGH) has been entrusted to come out with a technical analysis of the D&M report. The consultant reportedly opined that nearly 11.2 billion cubic metres (bcm) of gas migrated from ONGC’s area to RIL. Of this, the private explorer is believed to have commercially drilled nearly 8.2 bcm of the migrated gas and sold it to customers.

“The report has offered two conclusions — that the blocks are connected and a specified amount of gas has migrated from one side to another. Now, the government needs to verify if this is in violation of any sections of the PSCs or even the IPC,” a top official told FE.

Government-run ONGC 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 hydrocarbon in 2009. ONGC has not produced oil or gas from its block. On September 10, the Delhi High Court 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.

After a detailed review of the D&M conclusions, the petroleum ministry could also seek legal opinion. “Let the ministry first find out if the issue is in violation of any norm. Accordingly, a legal opinion could be sought and further, ways to settle the issuewould be decided,” a second official said.

ONGC has already made its case stronger after it brought to the limelight modular dynamic tests (MDT) conducted by it through an independent and reputed service provider for evaluating current reservoir pressures in the wells G-4-3 and G-4-2 in the Godavari PML in January and February, respectively, which have revealed significant depletion in the pressure in the reservoirs.

Though there have been cases of joint field developments in India, this would be for the first time that two explorers are finding themselves at loggerheads. On October 20, FE reported that while ONGC and RIL have battled over the latter allegedly taking away gas worth about R8,500 crore from the state-run explorer’s portion of the KG basin, an over three-year-old arrangement has existed between the PSU and Cairn India under which the Vedanta Group firm processes not just its own, but also the PSU’s share of Cambay Basin gas.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition