Govt. seeks $1.55 billion from RIL for drawing ONGC’s gas

The Union government has sought $1.55 billion from Reliance Industries Limited (RIL) and its partners for drawing natural gas belonging to state-owned ONGC in the Krisna Godavari (KG) basin over the last seven years.

The Ministry of Petroleum and Natural Gas has sent a notice to RIL seeking the compensation, sources privy to the development said.

The Justice A.P. Shah Committee, in a report presented to the Ministry on August 30, felt that RIL should pay the government for the natural gas it had drawn from an adjacent block of ONGC in the KG basin of the Bay of Bengal in the past seven years.

In the report, the Committee said the Mukesh Ambani-run firm should pay for the gas that had migrated or seeped from ONGC blocks into its gas fields.

“RIL’s action of producing and selling gas migrated from ONGC block is unjust enrichment,” the report said, adding that over 11 billion cubic metres of gas had flowed from the ONGC block to RIL’s fields between April 1, 2009 and March 31, 2015. Of this, RIL had produced about 9 billion cubic metres (BCM).

The panel, however, said the compensation should go to the government and not ONGC.

The committee said: “The Government of India, and not ONGC, is entitled to claim restitution from RIL for the unjust benefit it received and unfairly retained. ONGC has no locus standi to bring a tortuous claim against RIL for trespass/conversion since it does not have any ownership rights or possessory interest in the natural gas.”

As much as 11.122 BCM of ONGC gas had migrated from its Godavari-PML and KG-DWN-98/2 blocks to the adjoining KG-D6 of RIL between April 1, 2009 and March 31, 2015. At prevailing prices, the gas was worth Rs. 11,000 crore.

While ONGC’s reservoirs have almost emptied, RIL continues to produce gas from D1 and D3 fields in KG-D6 block, some of it belonging to ONGC.

The Shah committee had relied on the report of independent consultant D&M to make its case.

D&M, in its November 2015 report, indicated that as on March 31, 2015, 44.32 per cent of the gas initially in place in Godavari PML and 34.71 per cent in KG-DWN-98/2 (both of ONGC) had migrated to KG-D6 of RIL.

The report projected a higher proportion of gas migration and its production through RIL operated KG-DWN-98/3 (KG-D6) block by the end of 2019.