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US consultant DeGolyer and MacNaughton (D&M) has submitted its report on the dispute between Mukesh Ambani's Reliance Industries Ltd and public sector company ONGC.
A senior official of the Ministry of Petroleum and Natural Gas at the sidelines of an industry event said that the D&M report has been submitted to the Ministry. Sources privy to the report said that D&M has found that as much as 15 per cent of the gas RIL and its partners pumped out of their block in the Krishna Godavari basin could belong to ONGC.
The report has also confirmed ‘reservoir continuity’ or in other words the absence of any barriers between the blocks of the two parties. The reserves in the D-1 and D-3 fields of the Reliance-BP-Niko KG D6 block total 2.9 trillion cubic feet, of which 2.1 trillion cubic feet has already been extracted. During the final meeting of the stakeholders and D&M, it emerged that of the total reserves in D-1 and D-3, about 15 per cent could belong to ONGC. Sources privy to the development also said that since the fields have been producing from 2009, a joint development of the fields is not possible as there is a residual life of just three to four years.
ONGC is expected to seek not just existing benefits but also compensation for the previous years. An internal team of ONGC is working on the valuation of the gas, and it will have to consider the investments already made by RIL and its partners as well as what will be the right price of the gas.
RIL has maintained that it has gone by the production sharing contract (PSC) which mandates that any activity undertaken by a contractor can only be done after approval of the block Management Committee. The management committee oversees the operations of the block and has representatives from the Ministry and Directorate General of Hydrocarbons with veto power.
The Ministry of Petroleum and Natural Gas will study the report before reaching a conclusion. However, the Delhi High Court had directed the Ministry to look for a conclusion within six months of submission of the report.
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