ONGC In­sid­ers Mis­lead­ing Chief to Hide their Fail­ures, Says RIL

Says ONGC should have acted long ago if it sus­pected neigh­bour­ing blocks of hav­ing a com­mon reser­voir

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Re­liance In­dus­tries has said it sus­pects that ONGC chair­man DK Sar­raf is be­ing mis­led by in­sid­ers who are try­ing to hide their fail­ure in de­vel­op­ing fields dis­cov­ered over 13 years ago, and strongly con­tested Sar­raf ’s state­ment that the state-run ex­plorer had to sue RIL for al­leged ‘theft’ of gas from its blocks ad­join­ing the KG-D6 gas field.

“We deny the claim of ap­par­ent ‘theft’ of gas from G4 & KG DWN 98/2 Block by Re­liance In­dus­tries (RIL) and can only at­tribute it to the like­li­hood of some el­e­ments in ONGC mis­lead­ing the new CMD Sar­raf in or­der to hide their own fail­ure to de­velop dis­cov­er­ies made over the last 13 years in these blocks,” RIL said in a state­ment is­sued on Fri­day.

RIL said if ONGC sus­pected that the neigh­bour­ing blocks had a com­mon reser­voir, the state-run firm should have acted long ago. “In fact, in 2007, ONGC had also ac­quired high res­o­lu­tion 3-D seis­mic data ex­tend­ing into KG-D6 Block. Thus ONGC was hav­ing data across both sides of the block bound­aries. Had con­nec­tiv­ity been an open and shut case, ONGC need not have waited so long to ap­proach DGH or RIL,” Re­liance said in a state­ment.

RIL said it was ‘sad­dened’ by the state­ment at­trib­uted to Sar­raf by me­dia re­ports on this is­sue. Sar­raf had told re­porters on Tues­day that ONGC’s sur­prise move to sue RIL for al­leged ‘theft’ of nat­u­ral gas from its blocks, was to pro­tect its ‘commercial in­ter­est’. Last week, ONGC moved the Delhi High Court al­leg­ing RIL might have drawn gas worth thou­sands of crores of ru­pees from a com­mon reser­voir in the KG-D6 block and had also ac­cused the oil min­istry and its tech­ni­cal arm of turn­ing a blind eye to the is­sue. “We con­tinue to see ONGC as a val­ued in­dus­try peer, wor­thy of col­lab­o­ra­tion, to whom we will con­tinue to pro­vide as­sis­tance to help de­velop its dis­cov­er­ies and start pro­duc­tion of valu­able gas locked be­neath the In­dian Ocean to the ben­e­fit of the people of In­dia,” the state­ment said. RIL and ONGC had signed an MoU in July 2013 to share in­fra­struc­ture in the basin, which would have sig­nif­i­cantly re­duced costs for the state-run firm. RIL ex­pressed sur­prise in a note to ed­i­tors that while the two com­pa­nies were en­gaged in dis­cus­sion on in­fra­struc­ture shar­ing since mid-2012, ONGC did not raise the is­sue of con- nec­tiv­ity of reser­voirs. RIL said ONGC brought the is­sue of a pos­si­ble com­mon reser­voir to its no­tice only in Au­gust 2013 through the Direc­torate Gen­eral of Hy­dro­car­bons (DGH). “Since then, as per in­ter­na­tional prac­tice, ONGC and RIL have been en­gaged in the process of ap­point­ing an in­de­pen­dent agency to in­ves­ti­gate the is­sue of pos­si­ble reser­voir con­nec­tiv­ity across the blocks,” the state­ment said. “Since the process for ap­point­ing this agency as per in­ter­na­tional prac­tice was al­ready well un­der­way, it is in­deed un­for­tu­nate that some el­e­ments in ONGC forced in­vo­ca­tion of the Delhi High Court at this junc­ture,” RIL said. RIL said ONGC should re­frain from mak­ing state­ments on this mat­ter be­cause the mat­ter was sub-ju­dice. “Res­o­lu­tion of such com­plex techno-commercial mat­ters that are not un­com­mon in the oil and gas in­dus­try is best done through the help of ex- perts rather than pub­lic pos­tur­ing. In any case, ONGC hav­ing al­ready filed a pe­ti­tion in the Hon’ble Delhi High Court, we would have ex­pected greater re­straint in a mat­ter that has been made sub-ju­dice by them,” it said. The re­la­tion­ship be­tween the two ex­plor­ers de­te­ri­o­rated af­ter RIL’s lawyer Har­ish Salve told the Supreme Court that RIL was be­ing sin­gled out for crit­i­cism for its per­for­mance in the KG-D6 block while there was no scru­tiny of ONGC’s nearby blocks where the project’s cost es­ti­mate and com­ple­tion pe­riod were re­vised many times. “Even af­ter 18 years, none of ONGC dis­cov­er­ies has ma­tured to a de­vel­op­ment plan stage,” Salve had ar­gued in the apex court re­cently. ONGC has dragged even the for­mer Di­rec­tor Gen­eral of Hy­dro­car­bons and the oil min­istry to court. ONGC said the DGH should have been vig­i­lant while clear­ing RIL’s field de­vel­op­ment plan, which in­volved drilling wells “at such a tan­ta­lis­ingly close dis­tance of 50 me­tres to 350 me­tres” from the com­mon boundary of the blocks. It also said the man­age­ment com­mit­tee, which has two govern­ment rep­re­sen­ta­tives, should not have ap­proved RIL’s plans to drill wells near ONGC’s block, par­tic­u­larly when it had ac­cess to RIL’s data. In the note to ed­i­tors, RIL said “all wells drilled by RIL dur­ing the de­vel­op­ment of D1-D3 (in KG D6) are well within the block bound­aries and ap­proved in ac­cor­dance with the PSC by the man­age­ment com­mit­tee con­sist­ing of govern­ment rep­re­sen­ta­tives, who have the power to veto”.

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