Little gas left at two ONGC blocks; fuel flows to RIL

There is a shadow on future production from the five discoveries of the government-controlled Oil and Natural Gas Corporation, after gas reportedly flowed from two of its blocks to the adjacent Reliance Industries units off the Andhra Pradesh coast.

Dallas-based DeGoyler and MacNaughton (D&M), in a report submitted to the government on Tuesday, has put a question mark on the future production from the five ONGC discoveries. It has established continuity of the reservoir in three blocks of Reliance Industries and ONGC.

Mukesh Ambani-promoted Reliance Industries could be in a tight spot if the government holds it responsible for movement of natural gas to its production facility from the ONGC-controlled acreage. It is now looking for a solution within the production-sharing contract.

In its report, D&M said only 385 billion cubic feet natural gas could now be produced from ONGC's acreage, and this volume was possible only from Reliance Industries' facilities, since the pressure built-up - crucial to production - had fallen significantly, said a person who has seen the report.

This could create a hitch in the early resolution of the gas row between two of India's largest oil companies. Delhi High Court had asked the government to resolve the issue within six months of submission of the report.

ONGC had initially estimated 1.7 trillion cubic feet gas reserves in six discoveries in its two blocks that sit next to Reliance Industries' D6 block in the Krishna-Godavari basin off the Andhra Pradesh coast.

Oil and Natural Gas Corporation Limited (ONGC)

Reliance Industries Limited (RIL)