ONGC faces heat for delay in developing East Coast gas blocks

Public sector explorer Oil and Natural Gas Corporation (ONGC) is facing the heat of the ministry of petroleum and natural gas over the delay in developing its East Coast discoveries.

The ministry has instituted an internal inquiry over why ONGC has failed to commercialise its discoveries when other explorers, including private sector companies that started around the same time have achieved their targets

ONGC had, in 2012, submitted a development plan to the Directorate-General of Hydrocarbons (DGH), which followed a cluster approach for developing around 11 discoveries in the East Coast.

But with the drop in Reliance Industries' D6 block output, the public sector operator was asked to come up with a more detailed development plan.

ONGC had submitted a revised development plan to the DGH in 2013, dividing its East Coast development into Northern and Southern Discovery Areas.

ONGC's East Coast finds also comprise an ultra-deepwater discovery (UD-1). According to early reports, ONGC had made a conservative estimate of producing 6-9 million standard cubic metres of gas from its East Coast finds by the middle of 2017.

But the development is nowhere near target and looks set for further delay with its dispute over Reliance Industries allegedly drawing gas from its adjacent block off the Andhra Pradesh coast.

The inquiry may also go into ONGC's allegations that Reliance Industries drawing gas from ONGC's adjacent block (See: ONGC takes RIL to court over 'stealing' of its Krishna-Godavari gas).

ONGC had moved the Delhi High Court against RIL on the issue, and had also made the ministry and the DGH respondents on grounds that the two had not done enough to protect the public sector entity's rights.

The ministry had termed ONGC's allegations as 'frivolous' and had sought rejection of ONGC's application.

The case, which was posted for hearing on 29 August, has since been adjourned. It is now expected to be taken up in January.

Meanwhile, ONGC and RIL have asked Texas-based DeGolyer and MacNaughton (D&M), an international petroleum consultant, to assess ONGC's claims (US consultant to verify ONGC-RIL claims over Krishna-Godavari gas).