RIL, ONGC sign pact for sharing infrastructure
29 July 2013
Reliance Industries Ltd and state-run ONGC had been working on plans for signing a formal pact for sharing of infrastructure in the gas-rich D6 block of the Mukesh Ambani firm, a move industry officials said could end the dispute over the alleged 'gold-plating' of costs in the deep-sea gas field of RIL.
ONGC, which was developing deep-sea fields next to Reliance's D6 block, said that it had signed a "significant" memorandum of understanding (MoU) with RIL on working out modalities for sharing infrastructure, identifying additional requirements and firming up commercial terms.
According to ONGC, this would minimise its capital expenditure and speed up development of its deep-sea gas fields which would produce 6-9 million metric standard cubic metres a day (mmscmd) of natural gas in four years.
"The companies intend to enter into a formal agreement after conducting a joint study which will be spread over the next nine months," ONGC said in a statement.
According to The Economic Times it was the first to report that state-run ONGC would use the private company's infrastructure in the east coast.
According to ONGC chariman Sudhir Vasudeva, it was a win-win situation not only for both the companies which were striving hard to accrete new reserves and put them on production at the quickest time but also for energy starved nation.
According to Business Line, ONGC had drawn a roadmap for substantial investments over the next five years for exploration and developmental activities.
Deepwater exploration formed a major component of the same, and ONGC had estimated that it would produce about 6 to 9 million metric standard cubic meter per day of gas by mid-2017 from G-4, Krishna Godavari-DWN and D&E fields, the release said.
The MoU was signed by Ashok Varma , executive director, asset manager Eastern Offshore Asset, ONGC and Naresh K Narang, senior vice president, Development Projects, Petroleum E and P , RIL.