Reliance Industries faults Shah panel engagement on gas dispute

New Delhi, Jan 10: Reliance Industries has faulted the constitution of the Justice Ajit Prakash Shah panel by the government to decide the company’s KG Basin gas dispute with state-run ONGC, saying this was without legal basis and that arbitration alone can decide on the matter. “The dispute raised by ONGC cannot be resolved in this manner,” the company said in a letter to the government, written last month, a copy of which was accessed by IANS.

“Furthermore it is RIL’s respectful submission that the office memorandum is apparently not rooted in any statutory power and is also contrary to the substantive as well as the dispute resolution provisions of the PSC (production sharing contract).”

The office memorandum pertains the formal setting up the Justice Shah panel. The letter said Reliance Industries does not accept the premise that the government can appoint a committee, or can deal with any issues on the dispute by constituting a panel.

Official sources here said the Oil and tural Gas Corp (ONGC) wants the committee to fix some compensation and pelty for the tural gas that flowed from its own blocks in the Krish Godavari (KG) basin in Bay of Bengal to the neighbouring KG-D6 fields of Reliance.

But Reliance Industries has all along being rejecting such assertions. “The claims of ONGC have been, and are, vigorously disputed by RIL on merits, both in fact and law,” the company said, adding these also has to be done in accordance with law.

“If ONGC wants to lay a claim on the ground that gas migrated from areas in their block to the RIL block, it would have to identify a legal basis to lay such a claim,” said that letter while finding it odd that the office memorandum at the outset assumed that a claim was sustaible. (IANS)