ONGC accuses DGH of targeting its share price

Vol 10, PW 21 (22 Feb 07) News in Brief

War has erupted between the DGH and ONGC over its gas discovery at well UD-1 on deepwater block KG-DWN-98/2, where Cairn Energy holds 10%.

DGH boss VK Sibal has been widely reported refusing to acknowledge or accept the discovery. ONGC accuses the DGH of "trying to spoil our share price" and "deny us cost recovery." Last December, ONGC carried out a successful Modular Dynamic Test of UD-1.

"MDT is a globally accepted sampling technique to report discoveries," ONGC tells us. "Sandeep Kumar Gupta (of the DGH) was on board the rig (Belford Dolphin) between 8th and 15th December 2006 to witness the test." At a subsequent lunch meeting, says ONGC, "the DGH agreed we made a discovery".

Trouble began when ONGC abandoned UD-1. "Abandoning a well is not a big thing,"‌ adds ONGC.

"An exploration well is expendable." ONGC says it will contest the DGH stand. On 20th February, ONGC shares fell 3.24% to Rs875.60 on news of the DGH decision.