RIL U-turn on gas row; will par­tic­i­pate in Shah panel’s pro­ceed­ings

FIRM HAS EAR­LIER AS­SERTED THE PANEL HAS NO POWER TO AD­JU­DI­CATE MAT­TERS CON­CERN­ING ONGC CLAIMS; ITS REC­OM­MEN­DA­TIONS WOULD NOT BE BIND­ING ON RIL

Resource Digest - - CONTENT -

In a sig­nif­i­cant U-turn in its ap­proach to­wards the on­go­ing gas dis­pute with state-run Oil and Nat­u­ral Gas Cor­po­ra­tion (ONGC), the Mukesh Am­bani-con­trolled Re­liance In­dus­tries Ltd (RIL) has de­cided to par­tic­i­pate in the pro­ceed­ings of the govern­men­tap­pointed Shah Com­mit­tee that is look­ing into the mat­ter.

“The se­cond meet­ing of the Shah Com­mit­tee was held a cou­ple of days ago. RIL at­tended the meet­ing and (its rep­re­sen­ta­tives) said we would like to par­tic­i­pate. Niko Re­sources also par­tic­i­pated,” ONGC Chair­man D K Sar­raf told a me­dia gath­er­ing while an­nounc­ing the com­pany’s third quar­ter re­sults. He was re­spond­ing to a ques­tion on the sta­tus of the con­tro­ver­sial gas dis­pute.

An RIL spokesper­son re­fused to com­ment. The com­pany did not re­spond to an e-mail query. The com­pany had ear­lier told the panel it does not ac­cept that the Govern­ment of In­dia can ap­point a ‘com­mit­tee’, or the govern­ment can deal with any is­sues on the dis­pute by con­sti­tut­ing a com­mit­tee, ac­cord­ing to of­fi­cials. It had con­tended the Shah panel has no power to ad­ju­di­cate any mat­ters or is­sues con­cern­ing the claims of ONGC and its rec­om­men­da­tions would not be bind­ing on it.

Sar­raf added the com­mit­tee in the last meet­ing gave both RIL and Niko Re­sources three weeks time to sub­mit their views on the gas row which will be shared with all the in­ter­ested par­ties in­clud­ing the oil min­istry, the Di­rec­torate Gen­eral of Hy­dro­car­bons, RIL and its part­ners, BP and Niko. “ONGC has also been given a fur­ther two weeks time to re­spond, af­ter which the next meet­ing will take place on 19 March,” he said.

RIL’S other part­ner, Bri­tish oil gi­ant BP, had last month said it would co­op­er­ate in the pro­ceed­ings of the panel in or­der to re­solve the is­sue “with the ob­jec­tive of de­liv­er­ing mu­tual value”. BP’S stand had fu­elled spec­u­la­tion over a pos­si­ble rift be­tween RIL and BP over the mat­ter.

Both RIL and ONGC are en­gaged in a bat­tle over ONGC’S claim that RIL ex­tracted nat­u­ral gas from ONGC’S KG-D5 block in the Kr­ishna-go­davari basin off the Andhra coast. The Delhi High Court had last year dis­missed ONGC’S ap­peal for com­pen­sa­tion and gave the govern­ment six months to take ac­tion on a re­port on the mat­ter by in­ter­na­tional con­sul­tant De­golyer & Macnaughton.

D&M, in its Novem­ber 30 re­port, es­tab­lished reser­voirs in ONGC’S KG basin blocks 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 said as much as 11.122 bil­lion cu­bic me­ters of nat­u­ral gas may have mi­grated from idling fields of ONGC to ad­join­ing KG-D6 block of RIL.

The oil min­istry had later set up the sin­gle-mem­ber ju­di­cial panel headed by A P Shah, for­mer Chief Jus­tice of the Delhi High Court, with the man­date to “quan­tify un­fair en­rich­ment”, if any, to the con­trac­tor of the KG-D6 block.

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