Finshots Daily Reliance, ONGC, and the missing unitisation agreement
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Feb 24, 2025 Dive into the tangled saga of a decade-long gas migration dispute between two industry giants, Reliance and ONGC. Investigate how the absence of a unitisation agreement may have exacerbated their conflicts. Unpack the legal complexities surrounding gas extraction rights and the ethical dilemmas tied to resource ownership. Explore the potential repercussions for Reliance, including possible compensation to the government, spotlighting the crucial need for clearer regulations in the sector.
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There Will Be Blood & Rule of Capture
- In the film "There Will Be Blood," Daniel boasts about extracting oil from Eli's land without buying it.
- This illustrates the "rule of capture," where the first to extract resources owns them, regardless of origin.
Unitization Agreements
- The Reliance-ONGC dispute, like the rule of capture, highlights issues with resource migration.
- Unitization agreements, where shared reservoirs are treated as one entity, can prevent such conflicts.
UK-Norway Unitization Example
- The UK and Norway successfully used unitization agreements for the Frigg gas field.
- This set a precedent for resolving cross-boundary resource disputes by joint development and operation.