operate. At the then officially
administered price of natural gas
of $4.2 per mBtu, the total value of
the gas belonging to ONGC which
RIL has extracted has been
estimated at $1.7 billion orRs
11,055 crore at the then prevailing
exchange rates.
Why did ONGC’s decision to
move court on 15 May 2014
surprise so many? The company
was under pressure from the very
beginning not to act in the manner
that it did. The outgoing minister
of petroleum and natural gas in the
United Progressive Alliance (UPA)
government at that time was
Veerappa Moily. He shot off a note
to the then Secretary in the
MoPNG, Saurabh Chandra, calling
for an enquiry as to why ONGC had
dared to initiate legal action against
its biggest shareholder. (Roughly
70% of ONGC’s shares are owned
by the Union government through
the MoPNG.)
What is especially noteworthy
is the fact that Moily’s note, dated
22 May 2014, was written almost a
week after the UPA government was
voted out of power in the general
elections and just four days before
Narendra Modi was sworn in as
Prime Minister on 26 May. In a
statement dated 15 May, RIL said
that all its operations had been
undertaken in accordance with the
PSC and the development plan
approved by the management
committee which had government
representatives holding veto
powers. It added that all well
locations and their profiles had
been specifically reviewed and
approved by the committee.
Moreover, RIL said that there had
been “constructive engagement”
with ONGC on sharing of data and
on appointing an “independent
third party expert” at a meeting
held on 9 May 2014.
Ministry Opposition
The MoPNG and DGH filed a
counter-affidavit in the dispute in
December 2015
August 2014 claiming that the
allegations of ONGC were
“frivolous,” that the issues raised
by the PSU had been looked into
and sought dismissal of the
petition. The 70%owner of ONGC
was, in effect, stating that its
offspring should not have gone to
court alleging theft of gas by RIL.
The MoPNG said that ONGC had
not raised any “issue on
connectivity ofreservoirs and
channels” when the mining lease
of G4 block was granted to it six
years earlier in 2008 nor when
production of gas from the KG-D6
block by RIL started in April 2009.
The ministry’s submission said
that ONGC “woke up from (its)
slumber only in July 2013, when it
requested the government to
provide the G&G (geological and
geophysical) data and that too to
analyse the continuity of the pool.”
The MoPNG said ONGC’s writ
petition had become “infructuous
pursuant to the appointment of the
independent agency,” that is, D&M.
The fact that D&M would be
chosen as the independent agency
to resolve the dispute between
ONGC and RIL had been first
suggested in a 16 July 2014 report
in the Hindu Business Line. The
two
companies
and
the
government agreed that D&M
would be appointed as the
independent agency to investigate
possible reservoir connectivity
across undersea gas blocks.
Thereafter, from 25 September
2014onwards, both ONGC and RIL
began sharing data with D&M.
On 26 November, the current
Minister of State for Petroleum and
Natural Gas, Dharmendra Pradhan,
told Parliament that D&M would
submit a report by June 2015 on
whether a company controlled by
RIL “stole” natural gas from the
wells where ONGC is contracted to
operate in the KG basin, as
alleged by the government-owned
company. The minister said that the
two companies under the
“supervision” of the DGH in the
MoPNG should haveappointed a
“third party” or an independent
agency “earlier” to “establish the
continuity of reservoirs across the
ONGC and RIL offshore deep water
blocks/areas in KG Basin.”
Postscript
On 2 December 2015,
newspapers reported that the final
report had been submitted by D&M.
According to the details given in the
news, it appears that the final report
is very similar, if not exactly the
same, to the interim report
discussed here.
THE VOICE OF INDIAN REVOLUTION
A CPI(M-L) TRIBUTE TO
COMRADE KANU SANYAL
Price : Rs. 150/-
For Copies :
Mythry Book House
Jaleel street, Karl Marx Road, VIJAYAWADA - 2
19