Centre to broker RIL, ONGC deal

The government may bring ONGC and Reliance Industries to the negotiating table again after its technical arm, the Directorate General of Hydrocarbons (DGH), comes up with its calculation on penalty the private explorer should pay the state-owned entity for producing gas from its neighbouring east coast block in Krishna Godavari (KG) basin for the past seven years.

Sources said that government expects that any penalty imposed on RIL would be strongly contested by the company and so negotiations may be the preferred route rather than involving all the stakeholders in long-drawn and expensive legal process.

However, a decision would be taken only after gauging response of the two companies once petroleum ministry approves penalty on RIL by September 30.

The date has been confirmed by petroleum minister Dharmendra Pradhan.

“We will explore all options to see that the dispute is resolved without further complicating issues,” said an official source privy to the development. The petroleum ministry has tasked DGH to calculate the penalty on RIL after Shah panel constituted to look into acts of omission and commission and recommend quantum of compensation for ONGC, left the decision on quantifying the amount of compensation/penalty with the government.

The panel, however, confirmed “unjust enrichment” of RIL from gas migrated from ONGC’s acreage adjacent to the private company’s KG-D6 block.

But added that state-owned entity lacked locus standi to bring a “tortious claim” against Reliance Industries.