State-owned ONGC on the other hand is cooperating and wants the panel to fix compensation and penalty for the natural gas that flowed from its Krishna Godavari basin blocks in Bay of Bengal to neighbouring KG-D6 fields of RIL, official sources said.

It rejected contentions that the cost incurred by RIL in setting up production facilities at KG-D6 will have to be first deducted before any money is due to it, saying the private company had invested money on the basis of discovered and producible gas resources it projected in its block. None of the investments made was for producing ONGC gas.

Moreover, all that investment incurred has been recovered by RIL from sale since April 2009 of gas, 15 per cent of which has now been established by an independent consultant to have come from ONGC's blocks. Sources said RIL has told the panel 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."

RIL argued that disputes can only be resolved by arbitration. An email sent to RIL spokesperson for comments remained unanswered. Oil Ministry officials said the Shah panel was constituted after the Delhi High Court directed it to decide on the dispute within six months of receiving a report of the independent consultant DeGolyer and MacNaughton (D&M).

Rather than relying on its internal assessments, the ministry thought it wise to get the former Law Commission head to look into acts of omission and commission and recommend compensation to ONGC. D&M, which was appointed mutually by RIL and ONGC under orders from the Court, in its November 30 report established that reservoirs in ONGC's KG basin blocks KG-DWN-98/2 (KG-D5) and the Godavari-PML are connected with Dhirubhai-1 and 3 (D1 & D3) field located in the KG-DWN-98/3 (KG-D6) Block of RIL.

It said as much as 11.122 billion cubic meters of natural gas, worth over Rs 11,000 crore, had migrated from idling fields of ONGC to adjoining KG-D6 block of RIL. Sources said RIL contended that the Shah panel has no power to adjudicate any matters or issues concerning the claims of ONGC and its recommendations would not be binding on it.

The ministry officials however said it is the government which will take a final call as directed by the High Court. Panel recommendations will be inputs for any such decision. RIL's non-cooperation will only delay a resolution, he said.

Latest News  from Business News Desk