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Reliance Industries may end up sharing benefits from its East Coast gas-producing block with ONGC if the technical teams of the two exploration majors find ‘connectivity’ in the reservoir.
The issue of sharing of volumes will arise only when connectivity is proved, an RIL executive said, adding, “There also has to be consensus between the two parties concerned on the issue. If there is no consensus, then an independent expert will be appointed to examine the data.”
Pro-rata allocation of volumes takes place once the continuity of reservoirs is established.
Timeline for process After ONGC’s request to the Government to access the data of RIL-operated KG-D6 block, which is adjacent to the public sector explorer’s KG-DWN-98/2, to study the continuity of the reservoir, the technical teams of the two companies have started examining the data. Officials in both the companies told Business Line that it was difficult to put a timeline on when the entire process would be completed.
According to a senior RIL executive, no wells have been drilled in the area that ONGC is talking about, and hence, ONGC’s allegations that RIL was drawing its gas can be questioned.
However, ONGC says that after reviewing the data of its block, it suspected that there may be continuity of reservoirs across the block. “These are natural geological concurrence and not man-made boundaries,” a senior ONGC official said.
Sharing of data will not only help in deciding the reservoirs’ continuity, but also in assessing the amount of gas in two areas, the ONGC official said.
Seeking information about adjacent blocks for geo-scientific purposes is a common global practice (at times between countries), as it helps in understanding the area better, an ONGC official said. In fact, domestic operators, such as Reliance Industries, have also done so.
Two areas ONGC has divided the block into two areas — north and south. The company is not touching the ultra deepwater discovery in that block as yet. The company hopes to bring the northern area of the block into production by 2017-18.
It has submitted the declaration of commerciality for the northern area to the Directorate-General of Hydrocarbons. This will be followed with a field development plan.
Recently, ONGC inked a memorandum of understanding with RIL for sharing the latter’s infrastructural facility in the East Coast.
This will not only minimise ONGC’s initial capex, but also expedite its field development, resulting in early monetisation of the finds.
richa.mishra@thehindu.co.in
siddhartha.s@thehindu.co.in
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