ONGC, DGH under scrutiny for gas migration: Pradhan

The ministry of petroleum and natural gas is scrutinising the actions of its Oil and Natural Gas Corporation, the directorate general of hydrocarbons (DGH) and the then Congress-led government, regarding the gas migration row in the D6 block of the Krishna-Godavari basin, petroleum minister Dharme-ndra Pradhan said.

A $1.55-billion penalty notice has been put on the Mukesh Ambani-led Reliance Industries (RIL) for producing ONGC’s share of natural gas in the basin. “There is an amount of responsibility on the then government, DGH and ONGC on the gas migration case. We are looking into the role of all the stakeholders to bring out the facts. The country should know what is black and what is white,” Pradhan told reporters at the Economic Editors’ Conference-2016.

RIL and its partners, BP and Niko Resources, were judged guilty on the absis of a panel's report. RIL has decided to go for arbitration; it was supposed to pay the fine within 30 days from November 3, when it got the notice from the government.

The Shah panel report in question had said ONGC was not eligible for a share of the penalty RIL paid. Asked if the government would revisit this decision, Pradhan said, “By law, natural gas belongs to the country. That is why the Shah panel also suggested ONGC was not liable to have a share of it.”

The Shah panel had said RIL and its partners had received “unjust” benefit through the migration of gas from ONGC’s block. It also pointed to provisions in the production sharing contract that provided for unitisation, a technical term for valuing of shares in the case of overlapping reservoirs, of natural gas. According to ONGC, RIL benefited from gas flow between their adjacent fields from 2009 to 2013. It was in the latter year that ONGC made the claim that

RIL intentionally drilled wells close to its blocks, through which the gas had migrated.

Subsequently, D&M, a US-based consultancy, was appointed by both RIL and ONGC to study the issue.

Oil and Natural Gas Corporation Limited (ONGC)