"Reliance In­dus­tries got Rs 8,500 cr of gas from ONGC’S KG block"


Resource Digest - - CONTENTS -

Pri­vate ex­plorer Reliance In­dus­tries (RIL) ex­tracted at least 9 bil­lion cu­bic me­tres (bcm) of gas from gov­ern­ment-owned ex­plorer ONGC’s block in the Kr­ishna-Go­davari (KG) Basin block off the Andhra Pradesh coast, ac­cord­ing to a draft re­port by the US-based in­ter­na­tional con­sul­tant DeGolyer and MacNaughton (D&M).

This means that at an av­er­age gas price of $4.20 per mil­lion Bri­tish ther­mal units and an ex­change rate of Rs 60 against the dol­lar, RIL drilled gas worth Rs 8,000-8,500 crore that be­longed to ONGC, say two Mum­bai-based an­a­lysts.

Sources privy to the de­vel­op­ment said that hav­ing just re­ceived D&M’s draft re­port, the Direc­torate Gen­eral of Hy­dro­car­bons (DGH) would now seek com­ments on D&M’s find­ings from both ex­plor­ers.

A fi­nal re­port may take a few more weeks. The petroleum min­istry would de­cide on the ac­tion to be taken only af­ter it re­ceives D&M’s fi­nal re­port as re­viewed by DGH.

Ac­cord­ing to D&M’s find­ings, of around 59.5 bcm of gas that was ex­tracted by RIL since in­cep­tion (2009) from its block KG-DWN-98/3, com­monly known as KG-D6, around 9 bcm or 15% is sus­pected to have flowed in from the adjacent block, KG-DWN-98/2, which be­long to ONGC.

“It is es­tab­lished that the un­der­ground reser­voir of the two blocks is con­tigu­ous,” an of­fi­cial said. Last week, talk­ing on the is­sue, petroleum min­is­ter Dharmendra Prad­han said in Pune that “the law should take its own course”.

RIL had not re­sponded to an email seek­ing its com­ments on the D&M draft find­ings till the time of go­ing to press. ONGC chair­man and man­ag­ing di­rec­tor Di­nesh K Sar­raf did not an­swer calls to seek his views.

ONGC had moved Delhi High Court al­leg­ing theft of its gas by RIL by way of drilling wells close to its block. The PSU, how­ever, has not pro­duced oil or gas from the block. On Septem­ber 10, the Delhi High Court dis­posed of ONGC’s pe­ti­tion and di­rected the gov­ern­ment to take a de­ci­sion within six months af­ter it re­ceives the re­port from an in­de­pen­dent panel.

The con­sul­tant D&M found that gas flowed out from a few wells drilled by RIL in­clud­ing A5, A9 and B8, which were closer to ONGC block. In ad­di­tion, gas reser­voir from an­other area — G4, which be­longs to ONGC and adjacent to its KG-DWN-98/2 block — is also con­nected to RIL’s KG-D6.

ONGC’s claim of RIL’s ex­trac­tion of gas from its block was re­it­er­ated when it en­gaged Sch­lum­berger to drill wells in the block early this year. The re­sults showed that gas pres­sure in the newly drilled wells had re­duced by more than half com­pared with prior find­ings. It in­di­cated that gas was drained out of the block.

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