Degolyer and Macnaughton (D&M), a consultant based in Dallas, USA, in its preliminary report, has established continuity of reservoirs across oil and gas blocks owned by ONGCBSE -0.24 % and RIL in the KG basin. It has also said some natural gas may have migrated from the state firm's block to one being operated by private explorer RIL .

On October 8, D&M, appointed to establish alleged improper excavation of gas by RIL, submitted its preliminary report to both companies and sought their comments within 10 business days.

The report, accessed by ET, has no adverse observation on the role of the director general of hydrcarbons (DGH), the sector regulator or any discussion of unauthorized withdrawal of gas by RIL. It is also silent on compensation, if any, to be awarded to ONGC.

"This is a technical report and D&M doesn't have the mandate to comment on individual stakeholders or if RIL deliberately drained gas, or if any compensation is to be paid. This will be decided by Ministry of Petroleum and Natural gas, once final report or Green Book is submitted to it in November." explained a source familiar with the ongoing exercise.
 
In May this year, ONGC had moved Delhi High Court alleging that RIL had siphoned off natural gas from its fields adjacent to the KG-D6 block in the Krishna Godavari basin.

The Economic Times has reviewed the 500 page preliminary report. According to the D&M report, migration of gas is established. "As of March 31, 2015, the FRRM (Full filled Reservoir model) estimated a gas migration of approximately 11.12 bcm from the Godavari PML (ONGC) and KG DWN 98/2 (ONGC) contract areas to the KG DWN 98/3 (RIL) contract area."

The report says that out of the 58.68 bcm of gas produced so far, 49.69 bcm belongs to RIL, and 8.981 bcm could have come from ONGC's side.

It also said that if current production continues, then by 2019, around 12.71 bcm of gas shall migrate from the KG-DWN-98/2 to the KG-DWN-98/3 contract area, out of which 10.9 bcm will be produced. The crux of the D&M report is that the RIL and ONGC blocks are in one reservoir.

Total connected volumes worked out by D&M is around 96.15 bcm, out of which 12.8 bcm is from a block called Godawari PML (ONGC), 8 bcm is in another ONGC block and 75.33 bcm of gas is on the RIL side.

The Economic Times has also reviewed a confidential communication about depletion of gas volumes in ONGC's blocks. As a result ONGC may not find it worh its while to develop the blocks, an official familiar with the matter said. ONGC, in 2013, had alleged that Reliance IndustriesBSE 0.55 % had drained out gas from the state-run firm's idling deep-sea gas fields which are adjoining and possibly connected to RIL's KG-D6 block.

The Economic Times had on October 24, 2013, first reported ONGC's allegations. On October 2, this year ET reported the findings of the D&M report.

Reliance has consistently maintained that it has abided by its production sharing contract (PSC) and done only what was officially authorized.

" RIL, as a prudent operator, has followed all provision of PSC. Every activity has been undertaken following extensive discussion with and approval of the Management Committee (MC) including MoPNG and the DGH officials," its spokesperson had said.

ONGC has sought to strengthen its own case with data on how pressure in its field is declined. It had submitted a study conducted by oil services company Schlumberger, to DGH, which was further shared with D&M and RIL. On April 19, Schlumberger forwarded its test report to ONGC, which suggested reduced pressure.

This test was conducted from April 2 to April 7, and the report finalised and shared with DGH and RIL. ONGC, which has around 11 discoveries in the region, has plans to develop G4 and KG-DWN blocks by 2017 and has estimated 4 trillion cubic feet of gas reserves in the KG-DWN-98/2 block. Reliance's D6 block in the Krishna-Godavari basin, borders ONGC's DWN 98/2 Block, and ONGC's G4 gas field is also near RIL's block.

On September 10 the Delhi High court, disposed off ONGC's petition and directed government to take a decision, after it receives report from an independent panel set up to arbitrate between RIL and ONGC.