The Delhi high court (HC) division Bench on Thursday sought a response from Reliance Industries (RIL) and others regarding the government's appeal against the Mukesh Ambani-owned conglomerate and others for fraudulently and unjustly enriching themselves by draining gas from their deposits, amounting to over $1.5 billion. The Centre had appealed against the single-judge Bench order of the Delhi HC on May 9, which had dismissed its petition. Justice Anup Jairam Bhambhani had upheld the international arbitration award of July 24, 2018, in favour of the RIL-led consortium. The consortium includes UK-based BP Plc and Niko Resources of Canada.
The Delhi high court has rejected a government challenge to an arbitration panel award that had ruled in favour of Reliance Industries Ltd in a dispute over gas migration from fields operated by state-owned ONGC in the KG basin. The government had slapped a provisional penalty of $1.55 billion on Reliance for "unjust enrichment" from gas migrating from the ONGC-operated KG-D5 block to the private firm's adjoining KG-D6 area. It had sought $175 million in additional profit petroleum from Reliance and its UK partner BP Plc.
Government plans to sell 5 per cent of its shareholding in ONGC in the follow-on public offer next month.
RIL had drawn 58.67 bcm from the wells up to March 31, 2015.
A report, by DeGoyler and MacNaughton, has put a question mark on the future production from the five ONGC discoveries.
Experts say finding a solution within the high court-mandated timeline of six months may be tough.
RIL had drawn 58.67 bcm of gas from four wells.
The committee said whatever benefit RIL received in terms of the migrated gas is liable to be returned to the government.
Contract does not provide for retrospective penalty for 'such' acts
The government will now examine the report and decide on how and to what extend should ONGC be compensated for its gas being produced by RIL.
The stage for negotiations to settle the Krishna-Godavari basin dispute is long over, says a government official
According to a source close to the development, the government is set to come out with a notification in this regard by the end of this week.
Mukesh Ambani's Reliance Industries (RIL) might be denied a higher gas price from its D1 and D3 fields until the arbitration process with the government is over and a third-party expert report on the fall in output at the KG-D6 block is out.
RIL has maintained it had followed the production sharing contract (PSC) in letter and spirit and done no wrong and it has drilled all wells within its boundary.
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The 25-year production sharing contract, however, ends in 2029.
CAG had in its previous reports slammed Oil Ministry and its technical arm DGH for not exercising enough control and vigil over KG-D6 block.
Indian markets ended on a lower note after the stimulus announced by the European Central Bank (ECB) failed to meet expectation.
ONGC has suffered a loss of over Rs 30,000 crore due to alleged siphoning off of natural gas by Reliance Industries Ltd (RIL) from the PSU's well in Krishna-Godavari (KG) basin and appointment of an experts body on the issue "will not help", the state-run oil firm said.
Sensex, Nifty put up a good show in closing trade.
Dispute resolution provisions in the production sharing contract remained unimplemented, while the regulator faltered, points out Jyoti Mukul.
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The Management Committee headed by Director General of Hydrocarbons R N Choubey refused to take a view on appointment of renowned reservoir consultants Ryder Scott, DeGolyer and MacNaughton, Gaffney, Cline & Associates or Netherland, Sewell & Associates to ascertain if RIL's claims of fall in reserves are actually true or the firm was hoarding gas by producing less, official sources said.
Dharmendra Pradhan lays bare the next course of action for his ministry and says RIL will have to pay the same price at which it produced the volumes.
A Texas company will submit a report by June on whether a company controlled by RIL 'stole' natural gas from the wells where ONGC is contracted to operate in the KG basin, as alleged by ONGC.
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