RIL rejects Shah panel role in dispute with ONGC

RIL rejects Shah panel role in dispute with ONGC

RIL rejects Shah panel role in dispute with ONGC

Reliance Industries (RIL) has challenged the jurisdiction of a panel set up by the government to inquire into the Oil and Natural Gas Corporation’s (ONGC) allegations that it removed gas from the latter’s field, and said that the dispute should be resolved by arbitration.

In a letter to Justice (Rtd) A P Shah, RIL said that it “does not accept that the Government of India can appoint a committee, or the government can deal with any issues on the dispute, or for the dispute by constituting a committee”.

The government had set up the Shah panel in December to quantify unfair enrichment if any, by Reliance and recommend ways to compensate ONGC and the government.

“It is RIL’s position that the committee has no power to adjudicate any matters or issues concerning the claims of ONGC, and any such recommendation of the committee, if made, would in no manner be binding on RIL,” the company said.

Both Reliance and ONGC have the option of approaching the court if they are not satified by the solution offered by the government.

Block skirmish
ONGC had earlier approached the court alleging that gas from its block was pumped out by Reliance, which had drilled wells very close to the common boundary of the blocks. RIL had earlier denied such allegations, assaying that it drilled wells inside its own block after due approvals.

RIL said that it has done nothing in breach of its legal obligations under its production sharing contract. The company said that if ONGC wanted to lay a claim on the ground that gas migrated from areas in their block to the RIL block, it will have to identify a legal basis to lay such a claim.

Reliance Industries and the government are already involved in disputes over expenditure incurred by the company in developing the KG-D6 block as well as pricing of natural gas.
DH News Service