No solution yet on ONGC-RIL gas siphoning case

ONGC has suffered a loss of over Rs 30,000 crore (Rs 300 billion) due to alleged siphoning off of natural gas by Reliance Industries Ltd (RIL) from the PSU's well in Krishna-Godavari (KG) basin and appointment of an experts body on the issue "will not help", the state-run oil firm said.

Making this submission before the Delhi High Court, the Oil and Natural Gas Corporation (ONGC) also asked as to where it would go for restitution if such a panel established that around 18 billion cubic metres of natural gas has been "siphoned off" causing a loss of over Rs 30,000 crore.

Senior advocate Rajiv Nayar, appearing for ONGC, made the submission while opposing RIL's plea for dismissal of the PSU's petition on the ground that an independent experts panel, as sought, has been appointed.

"We are talking of siphoning off of 18 billion cubic meters of natural gas between 2009 and 2013 and it is still going on till date. Whether the report (of experts’ body) comes or not, where will we go for restitution," he asked, adding that "the appointment of the independent body will not help."

"What about the natural resources decimated by this company over last one-and-a-half years? It is also a matter of immense public importance," he also said.

The court, however, asked ONGC to file its reply by the next date of hearing on April 22, after which it would decide the matter.

RIL, in its plea for dismissing ONGC's petition, has also sought the PSU's board resolution authorising the filing of its writ petition.

RIL also said that an independent expert body, US-based DeGolyer and MacNaughton, has been appointed as per the PSU's plea, to "establish continuity of reservoir and for gas balancing" across the two blocks of RIL and ONGC in the KG basin.

The same was the stand taken by the Centre, represented by Additional Solicitor General Sanjay Jain.

Pranav Sachdeva, appearing for an activist lawyer and a former bureaucrat who have sought to intervene in the matter, objected to appointment of the experts panel.

He said the report of this panel should be filed before the court before a decision is taken on ONGC's petition as "these are natural resources of the people that have been siphoned off by RIL".

The court had in September last year issued notice to ONGC on RIL's plea, but the PSU yet to file its reply.

RIL in its application has said that the matter was a contractual dispute between the parties and the only issue, of appointment of an independent third party, has been settled amicably, and thus ONGC's petition should be dismissed.

On May 29 last year, ONGC had submitted that it has suffered loss of gas worth Rs 30,000 crore as a result of RIL exploiting gas from its block in Krishna-Godavari basin. It had also contended that RIL has drawn out 18 billion cubic meters of natural gas from the combined reserves of both companies since 2009.

ONGC alleged that the current situation arose due to lack of vigilance on the part of the Directorate General of Hydrocarbons (DGH) and the central government and their failure to take precautionary measures, resulting in the loss of several thousands of crores of rupees to it.

It said that DGH should have insisted upon joint development of these blocks.

ONGC has claimed that of the total quantity of gas exploited by RIL from its block adjoining that of the PSU, more than half belonged to it. The blocks were given to it in 2006 and it had made them operational, the oil PSU had said.