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Business News/ Industry / Energy/  Shah panel to look into RIL, ONGC dispute: Dharmendra Pradhan
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Shah panel to look into RIL, ONGC dispute: Dharmendra Pradhan

The move comes after US consultant D&M stated that natural gas worth over Rs11,000 crore, had migrated from idling Krishna Godavari fields of ONGC to adjoining KG-D6 block of RIL

A file photo of the KGD6 basin.Premium
A file photo of the KGD6 basin.

New Delhi: A one-man committee was constituted on Wednesday to look into acts of omission and commission and recommend compensation to Oil and Natural Gas Corp. Ltd (ONGC) whose natural gas from Bay of Bengal block had flowed to adjoining fields of Reliance Industries Ltd (RIL).

The justice (retd) A.P. Shah Committee has been constituted two weeks after US-based consultant DeGolyer and MacNaughton (D&M), in its final report, stated that as much as 11.122 billion cubic meters of natural gas, worth over Rs11,000 crore, had migrated from idling Krishna Godavari fields of ONGC to adjoining KG-D6 block of RIL.

“We have constituted the committee headed by A.P. Shah, Chairman of Law Commission, to look into the report of the D&M and recommend action to be taken by the government," said oil minister Dharmendra Pradhan in New Delhi.

The panel has been asked to look into legal, financial and contractual provisions and submit a report within three months. It has also been asked to report any “acts of omission and commission" on part of all the stakeholders including RIL, ONGC, the Directorate General of Hydrocarbons and the government, added Pradhan.

According to the terms of reference, the Shah Commission has been asked to “quantify the unfair enrichment, if any, to the contractors of the adjacent block KG-DWN-98/3 (KG-D6) and measures to prevent future unfair enrichment to these contractors on account of gas migration". It has also been asked to “recommend action to be taken to make good the loss to ONGC/government on account of such unfair enrichment to the contractors".

Pradhan said the government will decide on future course of action based on recommendations of the Committee. D&M, had in its 30 November report, established that reservoirs in ONGC’s Krishna Godavari basin KG-DWN-98/2 (KG-D5) and the Godavari-PML are connected with Dhirubhai-1 and 3 (D1 & D3) field located in the KG-DWN-98/3 (KG-D6) Block of RIL. It states that as much as 11.122 billion cubic meters of ONGC gas has migrated from Godavari-PML and KG-DWN-98/2 to KG-D6.

Of the 58.68 bcm of gas produced from KG-D6 block since 1 April 2009, 49.69 bcm belongs to RIL and 8.981 bcm could have come from ONGC’s side, D&M said. At gas price of $4.2 per million British thermal unit (mmBtu), the volume of gas belonging to ONGC which RIL has produced comes to $1.7 billion (Rs11,055 crore).

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Published: 16 Dec 2015, 07:24 PM IST
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