RIL, ONGC sharing common gas field in KG basin: D&M

ONGC's accusations of Reliance Industries drawing gas from its wells have proved right with DeGolyer and MacNaughton (D&M), a reputed international consultant, backing the state-run oil and gas explorer.

According to D&M, RIL might have drawn a minimum 11.9 billion cubic centimetres (bcm) of gas from ONGC's 98/2 field nearby out of a total throughput of 58.67 bcm of gas from contiguous wells up to 31 March 2015.

At $4.2 per mmBtu, that gas is worth around $1.6 billion in gas price alone.

However, Oil and Natural Gas Corp's gas field in the KG basin is idling while Reliance has started extracting gas from the connected KG-D6 field in the Bay of Bengal.

DeGolyer and MacNaughton (D&M) in its preliminary observations stated that ONGC's Godavari Block (known as G-4) is contiguous to RIL-operated Block KG-DWN-98/3 (KG-D6), reports quoting sources privy to the development said.

The reservoir in the two neighbouring blocks are connected, which means there exists one big gas resource several meters below sea bed and does not recognise man-made boundaries that demarcate blocks of ONGC and RIL.

ONGC had, in 2013, claimed that RIL had deliberately drilled wells close to the common boundary of the blocks and that some gas it pumped out was from its adjoining block.

RIL has maintained that it had followed the production sharing contract (PSC) in letter and spirit and done no wrong – that all wells drilled are within its boundary walls.

D&M is reported to have seven sittings with officials of RIL and ONGC as well as the Directorate General of Hydrocarbons (DGH), the latest one being this week in Dallas, US, when it studied data of the two blocks and reservoir pressure tests conducted by ONGC last year.