RIL, partners asked to pay $1.55 billion as compensation for ONGC gas

The NDA Government has asked Reliance Industries and its partners in the KG-D6 block to pay $1.55 billion (about ₹10,350 crore) as compensation for benefits derived from the natural gas that flowed from ONGC’s adjacent fields in the Krishna-Godavari Basin, off the Andhra Pradesh coast. 

Based on the recommendations and model suggested by the single-member Justice AP Shah Committee, the government has made a claim against the contractors, RIL-BP-Niko, for gas said to have flowed from the neighbouring blocks. 

In response to the notice, RIL, headed by Mukesh Ambani, said it proposes to invoke the dispute-resolution mechanism in the Production Sharing Contract and issue a Notice of Arbitration to the government. In a statement, the company said “the Contractor has worked within the boundaries of the block awarded to it and has complied with all applicable regulations and provisions of the PSC.”

Note

Jul 2013: ONGC alleges that Reliance Industries intentionally extracted gas from its blocks in KG-D6

May 2014: ONGC moves Delhi HC and states that its Godavari Block and discovery block KGDWN-98/2 are contiguous to RIL-owned KG-D6

Nov 2015: Consultant D&M submits report, establishes that over 11.2 billion cubic meters of gas had migrated from ONGC’s idling KG fields

Dec 2015: A P Shah panel set up to look into legal implications

Aug 2016: Shah panel’s report confirms migration of gas from ONGC’s fields to RIL

Sept 30: Govt accepts Shah panel report in totality