Oil's Still Not Well

The gas migration dispute involving Reliance Industries and ONGC has taken a new turn; a resolution may take some time

- KRISHNA GOPALAN

IN MID-FEBRUARY, A DIVISION BENCH of the Delhi High Court overturned a ruling of an international arbitration tribunal in connection with a gas migration dispute between Reliance Industries Ltd (RIL) and ONGC. The tribunal had ruled in favour of RIL.

Following the ruling, the government has raised a demand of $2.81 billion on RIL and its partners.

The case concerns extraction of natural gas in the Krishna Godavari (KG) basin in Andhra Pradesh. ONGC claims RIL illegally extracted natural gas from its KG-D6 block between 2009 and 2013. As a result, the gas migrated from its adjacent field, causing it losses, says ONGC. RIL holds a 60% stake in the KG-D6 block. UK-based BP Plc owns 30% and Canada’s Niko Resources 10%.