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
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”.