New Delhi, Aug. 31: In a major blow to ONGC, the Justice AP Shah committee has said that the company is not eligible for any compensation that RIL will have to shell out for producing gas from the state-owned explorer's fields in KG basin for the past seven years as it did not have any ownership right over the gas.
The one-man committee said the government was the sole beneficiary to claim compensation from RIL for "unjust enrichment."
"On the question of unjust enrichment, the committee concludes that 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 tortious claim against RIL for trespass/conversion since it does not have any ownership rights or possessory interest in the natural gas," the report said.
The committee held that RIL was at fault for producing gas from the neighbouring block of ONGC.
"RIL's production of migrated gas and retention of the benefits amount to unjust enrichment, since the PSC (production sharing contract), in the absence of an order on joint development under Article 12, does not permit a contractor to produce and sell migrated gas," it said.
The committee accepted the amount of gas that migrated to RIL's fields based on the findings of independent expert DeGolyer & MacNaughton (D&M), which established reservoir continuity between KG-D6 and the ONGC blocks.
However, the Shah committee refrained from fixing a value to the migrated gas and asked the government to decide the amount.
"The committee faced significant limitations in giving a figure to the final value of the migrated gas produced by RIL during the term of its lease because of lack of data and the committee's inherent technical limitations. While the D&M report has to form the basis for the migration of gas up to 2015, subsequent migration post-2015 has to be inquired into by the government," the report said.
D&M had, in its November 30 report, established that reservoirs in ONGC's Krishna-Godavari basin - KG-DWN-98/2 and Godavari-PML - were connected to Dhirubhai-1 and 3 fields located in the KG-D6 block of RIL.
