Shah panel may get time till August-end to report on ONGC-RIL gas dispute

The petroleum ministry is likely to extend the tenure of the AP Shah Committee looking into the dispute between state-owned Oil and Natural Gas Corporation (ONGC) and Reliance Industries Ltd (RIL) regarding the flow of gas between their adjacent fields in the Krishna-Godavari basin.

ONGC claims that RIL has benefited from gas flow between their adjacent fields during the 2009-13 period.

The committee was set up on 15 December 2015, as per the order of the Delhi High Court which was hearing ONGC's petition alleging that the RIL consortium was benefitting from the gas flow.

The Shah panel has sought one month's extension and the report on the migration of natural gas from ONGC's idling Krishna Godavari fields to the RIL's adjoining KG-D6 block is likely to be delayed by a month.

RIL maintains that it has drilled wells only within its block, as approved by the regulatory authority, and was not guilty of any wrongdoing.

An independent consultant DeGoyler and MacNaughton (D&M) of the US, however, reported that the fields managed by the two companies shared the same reservoir, leading to migration of gas from ONGC's field to RIL's.

The committee has been asked to ''quantify unfair enrichment if any'' by RIL and recommend ways to compensate ONGC and the government.

Both the companies are now getting ready for pumping more investments into their respective fields to take advantage of the new pricing policy which prioritises domestic production of the cleaner fuel.

The new pricing formula announced by the government on 10 March allows producers to sell gas from hard-to-reach areas at a price linked to select imported alternative fuels such as fuel oil, naphtha and coal.

The petroleum ministry is expected to take the final decision on the accusations levied by ONGC of RIL stealing gas from its block based on the Shah panel recommendations.