Gas theft case: RIL may have to pay Rs 120 bn compensation to ONGC

Reliance Industries Ltd may have to pay up to 120 bln rupees as compensation to state-owned Oil and Natural Gas Corp Ltd for alleged theft of gas from the latter's gas fields in the Krishna-Godavari basin if the government agrees with the draft report on the matter prepared by expert agency DeGolyer and MacNaughton, ETNOW today reported.

According to the television news channel, the draft report indicates likely extraction of 2-18 bln cu mtr of gas by RIL from ONGC's assets, for which it may be asked to pay up to 120 bln rupees in compensation. ETNOW added that the oil ministry will examine the report and make it public by the end of next week. Responding to ETNOW, RIL said the gas extraction by the company was on the

basis of under-ground pressure and that it was incorrect to claim theft. The Mukesh Ambani-promoted company added that any compensation will have to take into consideration the capital expenditure, operational expenditure and royalty payment on the produced gas.

ONGC's G4 and KG-DWN98/2 blocks are contiguous to RIL's KG-DWN-98/3 block in the KG Basin. RIL's case is that gas from ONGC's field flowed to its gas field, which the company extracted. ONGC, on the other hand, says it was a deliberate act on the part of RIL. ONGC had taken RIL to court on the issue in May 2014. On Sep 10, the Delhi High Court had given the government six months from the date of submission of the said report to act on its findings.