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Rediff News  All News  » Business » ONGC accuses Reliance of 'stealing' gas, claims Rs 30,000 cr loss

ONGC accuses Reliance of 'stealing' gas, claims Rs 30,000 cr loss

May 30, 2014 08:43 IST

Image: RIL chairman Mukesh Ambani.
Photographs: Reuters

Oil and Natural Gas Corporation (ONGC) on Thursday told the Delhi High Court that it has suffered loss of gas worth Rs 30,000 crore (Rs 300 billion) as a result of Reliance Industries Ltd (RIL) exploiting gas from its natural gas block in Krishna-Godavri basin.

RIL contended before the court of Justice Manmohan that an independent expert panel can determine whether its gas well is interconnected with that of ONGC and what is the quantum of gas withdrawn by RIL and other issues raised by the PSU.

The Centre, represented by advocate Neeraj Chaudhari, meanwhile submitted before the court that as per a meeting held between the two companies and Directorate General of Hydrocarbons (DGH), it has been decided to appoint an expert panel.

After going through the minutes of the meeting, the court asked ONGC to file its counter to the same and listed the matter for further hearing on August 12.

ONGC accuses Reliance of 'stealing' gas, claims Rs 30,000 cr loss

Image: Reliance Industries KG-D6's floating production storage and offloading vessel.
Photographs: Reuters

As per the minutes of the meeting held on May 23, 2014, it has been decided by ONGC, RIL and DGH to send enquiry notices to four third party consultants prior to appointment of one of them as the expert panel.

It was also decided in the meeting that all data that will be shared with the finally selected independent agency and it will be done through DGH.

After appointment of the independent agency, ONGC, RIL and DGH would work out the project management modalities, the minutes said.

ONGC in its plea has contended that RIL has drawn out 18 billion cubic meters of natural gas from the combined reserves of both companies since 2009.

ONGC accuses Reliance of 'stealing' gas, claims Rs 30,000 cr loss

Image: An ONGC worker at a plant.
Photographs: Reuters

"The present petition is necessitated in view of bona fide belief on the part of the petitioner (ONGC), based on the seismic data made available by Respondent 3 (RIL) very recently in 2013-14 which suggests that while exploiting its own block and operating four wells for that purpose, RIL has exploited not only natural gas within its Block but has exploited substantial natural gas from Blocks in the control of ONGC," the PSU's petition also said.

During the proceedings, ONGC alleged that the current situation arose due to lack of vigilance on the part of the DGH and the Central government and their failure to take precautionary measures resulted in loss of several thousands of crores of rupees to it.

It said that DGH should have insisted upon joint development of the blocks. 

ONGC accuses Reliance of 'stealing' gas, claims Rs 30,000 cr loss

Image: ONGC plant.
Photographs: Reuters

ONGC has claimed that of the said total quantity of gas exploited by RIL from its block adjoining that of the PSU, more than half belongs to it.

RIL said that the blocks were given to it in 2006 and it made the same operational.

While it admitted that it is drawing gas from its block, it said that the independent expert panel will have to determine if the well of the company is connected with that of ONGC.

ONGC, in its petition, has also accused the government and RIL of not having followed the mechanism internationally accepted for joint development and which has been expressly provided in the Production Sharing Contract (PSC) signed between the Petroleum and Natural Gas ministry and RIL.

ONGC accuses Reliance of 'stealing' gas, claims Rs 30,000 cr loss

Photographs: Reuters

It has submitted that owing to the fact that the blocks of RIL and ONGC were adjacent to each other, the government should have ordered that they be jointly exploited by both of them.

ONGC has also sought directions to RIL to give an undertaking that it would compensate the PSU if the Mukesh Ambani-led group is held liable for the same.

It has also sought directions to RIL to "submit full accounts of the gas produced and to be produced and sold and to be sold and the values thereof from its four wells for the period from the date of actual production till date and for future production..." 

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