Oil and Natural Gas Corporation (ONGC) has hauled Reliance Industries (RIL) and the petroleum ministry to the Delhi High Court after the government and RIL failed to agree on appointing an external agency to determine the volume of gas being extracted by RIL from its blocks in the Krishna-Godavari basin.
The issue has arisen since ONGC and RIL own gas blocks adjacent to each other in the Godavari Petroleum Mining Lease. While ONGC has not started development of wells and extraction in its blocks, RIL has allegedly dug four wells near the boundary between its block and the land owned by ONGC.
According to the plea filed before the court of Justice Manmohan on Thursday, ONGC has accused RIL of having extracted excess gas from the common reserves in the area.
ONGC has alleged that the RIL had “unjustly” dug wells near the boundary, even though it had over 7,000 sq km of land under its control.
“In effect, RIL has, as is recently believed, taken out gas running into approximately 18 billion cubic metres (bcm) quantity between the years 2009 to September 2013 and continues to do so even till date from the combined gas reserves of ONGC and RIL,” states the plea.
The state-owned company had also alleged that the huge volume of extraction violated the production sharing agreement between ONGC and RIL, and multiple discussions had been held between the various agencies to set up an independent consultant, but the government had failed to do so. ONGC has also demanded compensation from RIL on the basis of the amount of gas extracted from the area.
RIL, in an emailed statement termed the allegations as “baseless”.
“All petroleum operations undertaken by RIL have been in accordance with the Production Sharing Contract and the Development Plan approved by the Management Committee which has government representatives with veto powers. All well locations and well profiles have been specifically reviewed and approved by the Management Committee,” RIL said.
The statement added: RIL has been constructively engaged with ONGC in sharing of data and finding a suitable resolution through appointment of an independent Third Party expert – the most recent being as late as on May 9, 2014. ONGC and RIL have jointly signed Minutes of a Meeting to record such an understanding. Any inference prior to such assessment is mere speculation and commencement of legal proceedings at this juncture is unwarranted.”
The court has issued notice to the petroleum and natural gas ministry and the directorate general of hydrocarbons along with RIL to respond to the plea.