Govt slaps Rs 10,000-crore fine on RIL for using ONGC’s migrated gas

The central government has fined Reliance Industries and its partners for resorting to illegal/unapproved way of drawing natural gas. The company has been drawing natural gas from state-owned ONGC in the KG belt for over 7 years.

The Oil Ministry has sent a notice to RIL seeking $1.55 billion compensation, sources privy to the development said.

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A committee led by Justice AP Shah showcased a report to the Oil ministry on August 30, demanding that RIL must pay government for the natural gas drawn by RIL industries, from an adjacent block of ONGC in the KG basin of the Bay of Bengal in the past seven years.

In its report, the one-member Shah panel said the Mukesh Ambani-run firm should pay for the gas that had migrated or seeped from ONGC blocks into its gas fields.

“RIL’s action of producing and selling gas migrated from ONGC block is unjust enrichment,” the report said, adding that over 11 billion cubic metres of gas had flowed from the ONGC block to RIL’s fields between April 1, 2009 and March 31, 2015. Of this, RIL has already produced about 9 bcm.

The panel, however, said the compensation should go to the government and not ONGC.

The committee said: “The Government of India, and not ONGC, is entitled to claim restitution from RIL for the unjust benefit it received and unfairly retained. ONGC has no locus standi to bring a tortuous claim against RIL for trespass/conversion since it does not have any ownership rights or possessory interest in the natural gas.”