ONGC alleges RIL deliberately extracted gas from its KG blocks

NEW DELHI: ONGC has alleged that RIL in a "well-planned and deliberate strategy" produced about $1.4 billion worth of its gas over past six years and demanded that the Mukesh Ambani firm pay full compensation with 18 per cent interest.

Reliance Industries had in 2001 and again in 2007 acquired seismic data to study hydrocarbon reservoir lying several hundred meters below the sea-bed not just in its Bay of Bengal KG-D6 block but also of neighbouring blocks of ONGC without the knowledge of the state-owned firm, it alleged.

The data acquired by RIL established that Dhirubhai-1 and 3 (D1&D3) gas fields in its KG-D6 block have a considerable extension into ONGC's adjoining blocks KG-DWN-98/2 (KG-D5) and Godvari PML, the state-owned firm said in a written submission to the AP Shah Committee looking into the gas dispute between the two firms.

"RIL concealed and did not reveal the data to ONGC," the company alleged. "RIL drilled its production wells at such locations (close to common boundary of the blocks) and with such angles so as to extract maximum gas from reservoirs falling under ONGC's blocks."

When contacted, RIL spokesperson said, "We deny all the allegations. We are confident of demonstrating that we have worked absolutely within our entitlement and there has been no impropriety on our part whatsoever."

Quoting from report of US-based independent consultant D&M, who was jointly appointed by RIL and ONGC to study gas migration between their blocks, the state-owned firm said 8.983 billion cubic meters out of the 58.676 bcm gas produced by D1&D3 field till March 31, 2015 came from KG-D5 and Godavari PML.

"The study also established that a total of 11.125 bcm of gas from ONGC blocks has migrated to RIL block due to the production activity," the company said adding RIL had drilled four wells - A5, A9, A13 and B8 close to ONGC's blocks.

"One well B8 is as near as about 50 meters to ONGC's block boundary. Well B8 and A9 are even inclined towards ONGC's reservoirs," the state-run firm said adding KG-D6 gas production in April 209 started with four wells drilled close to block boundaries of ONGC.

Stating that the "extraction of gas by RIL from ONGC's block has been the result of a well-planned and deliberate strategy by RIL and simultaneously as a result of several omissions on the part of DGH", ONGC demanded that the private firm needs to compensate it in "US Dollar together with interest at the rate of 18 per cent per annum for production from April, 2009."

The government had in December set up a one-man Committee under Law Commission Chairman A P Shah to look into acts of omission and commission and recommend compensation to ONGC whose natural gas from Bay of Bengal block had flowed to adjoining Dhirubhai-1 and 3 fields of Reliance Industries.