AP Shah Committee appointed to look into ONGC, RIL dispute on KG gas fields

Union Ministry of Petroleum and Natural Gas on 15 December 2015 appointed a single-member committee to look into the dispute between Oil and Natural Gas Corporation Limited (ONGC) and Reliance Industries Limited (RIL) on Krishna Godavari (KG) gas fields.

The committee will be headed by the Chairman of the 20th Law Commission of India Justice (retd) Ajit Prakash Shah.

The committee will look into acts of omission and commission and recommend compensation to ONGC from the RIL on account of undue advantage the latter has received due to enrichment of its gas fields from the adjacent blocks belonging to ONGC.

The recommendations of the committee will be based on D&M’s report on the dispute and will be submitted within three months from the date of its constitution.

Background

In the Krishna-Godavari Basin, ONGC owns Krishna Godavari basin KG-DWN-98/2 (KG-D5) and the Godavari-PML gas fields. These two fields are connected with Dhirubhai-1 and 3 (D1 & D3) fields located in the KG-DWN-98/3 (KG-D6) Block of RIL.

In 2014, the ONGC contended that RIL’s fields were being enriched due to migration of gas from its idle fields. Against this backdrop, the Union Government appointed the US-based consultant DeGolyer and MacNaughton (D&M) to look into the matter.

D&M, which submitted its report on 30 November 2015, concluded that out of the 58.68 billion cubic meters (bcm) of gas produced from KG-D6 block between 1 April 2009 and 31 March 2015, 49.69 bcm belongs to RIL and the rest 8.981 bcm could have come from ONGC’s fields.

And, as per an estimate of the D&M, the volume of gas belonging to ONGC which RIL has produced comes to the tune of 1.7 billion US dollars.

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