• Gas migration row between ONGC- Reliance: Government says Shah Panel can decide on compensation

    The petroleum ministry has told the Justice AP Shah committee on the migration of gas from ONGC-held gas blocks to adjacent fields of Reliance Industries that its remit includes deciding on possible compensation, if any, to the government as well over any “unfair enrichment”. That effectively rules out any other remedy under the production-sharing contract (PSC) or the possibility of fresh arbitration between Reliance Industries and the government, clearing the way for the single-member committee to issue its report on the matter by the end of July.

    The petroleum ministry’s June 7 communication to the panel, which is not in the public domain, came after Directorate General of Hydrocarbons (DGH) contended the government was the sole custodian of natural resources and compensation if any should go to the Centre rather than ONGC. Shah then issued an order regarding the matter. “The issue before it is the dispute between ONGC and RIL which includes the question of whether there exists a claim for unjust enrichment by ONGC against RIL,” Shah said in a May 9 ruling.

    “The committee clarified its mandate does not extend to considering claim, if any, between the government and RIL. If the government has any claim against RIL it can always resort to appropriate remedy under the production-sharing contract.” DGH’s submission had prompted the Shah panel to ask the government for its view. According to RIL, the intervention by DGH meant the matter needed to be enquired into afresh.

    RIL believes that any claim made by government against it would need to be resolved in another forum and therefore disassociated from the committee in light of new claims by DGH,” Shah recorded in the May 9 order. Responding to the May 9 order, the petroleum ministry assured the committee on June 7 that the government is in fact included under the terms of reference (ToR). These allow the panel to quantify enrichment, if any, to RIL held blocks and to “make good the loss to ONGC/government on account of such unfair enrichment to the contractor”. RIL also wrote to the petroleum ministry seeking fresh discussions on the subject.

    ONGC has sought compensation from RIL for what it says is the loss of more than 18 billion cubic metres (bcm) of gas that migrated from its Krishna-Godavari Basin fields as well as the gas left stranded due to allegedly poor reservoir management by RIL. It’s seeking the cost of the gas with 18% interest. RIL declined to comment on the matter. “It would be inappropriate to comment on the submission itself in deference to Justice Shah’s instructions to the parties to maintain strict confidentiality,” the company said in an email to ET. “We have already made our detailed submission to the Hon’ble Shah Committee regarding the filing made by (Canadian partner) Niko.  Steve McNair Womens Jersey

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