NEW DELHI:Reliance Industries Limited, belonging to Mukesh Ambani, and its partners in the East Coast gas block – KG D6, may end up paying an additional 15-20 per cent to the Indian government for the benefits it received from the disputed gas.Based on recommendations and model suggested by the single member Justice AP Shah Committee, the Directorate General of Hydrocarbons is working on the compensation that Reliance Industries will have to pay for extracting natural gas which migrated from ONGC’s adjacent fields.
The senior officials in the know told the media that the compensation would be decided after deducting royalty, cess and profit petroleum which the contractors had so far paid the government on the produce.
Another official said that they should have some numbers in place in the next week. The official also added that the glitch in deciding the compensation for the period April 2009 to March 2015 was royalty calculations, which was 5 per cent for some time and then became 10 per cent. It shall be on the prevailing gas price — 4.2 dollars per unit (gas is measured in million British thermal units). Besides, he added that calculations had to be done for future output and gas price to be taken.
On being asked why compensation should be paid to the government and not to the ONGC, the official replied that the mineral resource belongs to the country. He concluded that the contractor owns it only at the delivery point - where it sells to consumers. Thus, the compensation had to be paid to the government.
On a parallel note, the Ministry for Petroleum & Natural Gas might initiate an inquiry against the Oil and Natural Gas Corporation (ONGC) and other contractors for not disclosing information on gas migration although they were aware of it. The Shah Committee report shows that the ONGC knew of the development though the PSU contests this.
Confirming the continuity of reservoirs, the Shah Committee also quantified the amount of gas migrated from the Godavari PML and D1 discovery area of ONGC’s KG-DWN-98/2 to Reliance Industries’ Block of KG D6 from April 2009 to March 2015. It also quantified the amount of gas that would likely further migrate from April 2015 to March 2019. The Committee said that an independent consultant’s report must form the basis for the migration of gas up till the year 2015, and that migration of gas post-2015 has to be inquired into by the Modi government.
The consultant’s report found that up to 15 per cent of the gas could belong to the ONGC. It calculated that from April 2009 to March 2015, about 7.009 billion cubic metre and 4.116 billion cubic metre of gas had migrated from Godavari PML and D1 discovery of ONGC’s acreage to Reliance Industries’ block. Out of this, 5.968 billion cubic metre and 3.015 billion cubic metre respectively, were produced. The reserves in the D-1 & D-3 fields of the Reliance-BP-Niko KG D6 block total 2.9 trillion cubic feet, of which 2.1 trillion cubic feet or even more has already been extracted.
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