Directorate General of Hydrocarbons aware of KG gas flow into RIL blocks: ONGC

NEW DELHI: Oil and Natural Gas Corporation (ONGC) has told the Justice AP Shah committee that Reliance Industries Ltd (RIL) and regulator Directorate General of Hydrocarbons (DGH) knew gas from the stateowned company's blocks in the Krishna-Godavari basin was flowing into RIL's holdings in the area.

It sought an explanation from the regulator for this along with compensation from the company for the lost gas. The Shah panel was set up after a study by US-based consultant DeGolyer and Mac-Naughton (D&M), commissioned by both companies, said gas had indeed migrated.

"RIL and DGH had full prior knowledge of continuity and connectivity of Pliocene channels of all the blocks in question, and that there were acts of omission on the part of RIL right from 2002," ONGC told the Shah panel in a submission it made in the last week of January that ET has seen.

The regulator was remiss in not doing something to check this, ONGC said. "DGH as regulatory authority, should have initiated timely discussions/ actions under the PSC (production sharing contract), P&NG (petroleum and natural gas) rules and GIPP (gas initially in place)."

ONGC has sought compensation from RIL for the loss of more than 18 billion cubic meters (bcm) of gas that migrated from its fields as well as the gas left stranded due to poor reservoir management by RIL. RIL, which declined to comment for this story, has however consistently maintained it has abided by its production-sharing contract and all its actions were officially authorised. "RIL, as a prudent operator, has followed all provision of PSC. Every activity has been undertaken following extensive discussion with and approval of the management committee, including ministry of petroleum and natural gas and the DGH officials," its spokesperson had said previously.

Nothing in the D&M report suggests wrongdoing by RIL, the company had said. BP, which has a 30% participating interest in RIL's KG-D6 block, has cited some "uncertainties" in the D&M report in its submission to the panel that may impact gas volume estimates. Office of the director general of hydrocarbons Ajay Prakash Sawhney said he didn't want to comment on the matter. D&M had said in its final November report that more than 11 bcm of gas migrated from the state firm's blocks to RIL's fields.

"Total loss in terms of GIIP and ultimate recoveries based on history matched models are 26.067 bcm and 18.2469 bcm respectively. This would have to be compensated BY RIL," ONGC told the panel.

ONGC said RIL should be asked to compensate the state explorer for 9.476 bcm of gas that RIL has already produced, 1.435 bcm of estimated gas production from 2016 to 2019, and 7.3359 bcm of gas on account of poor reservoir management. The explorer also asked the committee to direct DGH to produce well proposal for KG-D6 location submitted in 2007 by RIL.