Thu. Mar 28th, 2024
ONGC Vs RILKG Basin Gas Theft Case

Oil and Natural Gas Corp (ONGC), the top energy company in India, has taken Mukesh Ambani-owned Reliance Industries Ltd (RIL) to the Delhi High Court.

The story so far is –

  • On July 27, 2013, ONGC issued a press release informing that it has inked a Memorandum of Understanding(MoU) with RIL to “explore the possibility of sharing the latter’s infrastructural facility in the East Coast.” The statement said, “The MoU aims at working out the modalities for sharing of infrastructure, identifying additional requirements as well as firming up the commercial terms.”
  • Within one year, in 2014, ONGC accused RIL of tapping gas from its block which is adjacent to the one being operated by RIL. The petition also blamed Oil Ministry for not taking adequate action on its information on the issue.                                      ONGC sought clarification from RIL on doubts that reservoirs in the adjoining blocks were linked. It feared that RIL’s D6-A5, D6-A9, and D6-B8 wells might be drawing gas from its G4-2, G4-3, and D-1 gas pools. because they were within “a few hundred meters.”
  • RIL gave a statement rejecting the accusation and claimed that all its petroleum operations were in accordance with the contract. It said, “All well locations and well profiles have been specifically reviewed and approved by the management committee.”
  • On May 29, 2014, the Centre stated, “A meeting among executives of the two companies and officials of Directorate General of Hydrocarbons, the ministry’s technical arm, decided to appoint an expert panel.”
  • The court went through the records of that meeting and asked ONGC to file its reply and listed further hearing on August 12.
  • ONGC, in its plea, asserted that RIL has drawn out 18 billion cubic meters of natural gas from the combined reserves of both companies since 2009.
    It further alleged that the current situation arose due to lack of vigilance on the part of the DGH and the Central government.
  • RIL said the blocks were given to it in 2006 and it made the same operational.
    While it claimed that it is drawing gas from its own block, it suggested that the independent expert panel should determine if the well of RIL is connected with that of ONGC.

The other developments in the case are–

  • The panel in July had rejected the contention that RIL had unjustly gained by producing gas from ONGC’s fields in the KG basin and RIL marked a significant victory.
  • The three-member tribunal headed by Singapore-based arbitrator Lawrence Boo in its 2:1 award agreed with RIL’s view that the production sharing contract (PSC) doesn’t prohibit the contractor from producing gas—irrespective of its source—as long as the producing wells were located inside the contract area.                                                  Also, it was held that RIL was not liable to pay any amount to the GoI.

Leave a Reply

Your email address will not be published. Required fields are marked *