The Mukesh Ambani-owned Reliance Industries Limited (RIL) has been asked by the NDA Government to cough up an additional penalty of 579 million dollars (Rs. 3,475 crore) for producing less than the targeted natural gas from its KG-D6 block in 2013-14.
Petroleum and Natural Gas Minister Dharmendra Pradhan announced this Parliament on Monday.
Gas output from Dhirubhai-1 and 3 gas fields in the eastern offshore KG-D6 block was supposed to be 80 mmscmd (million metric standard cubic meters per day) but the actual production was only 35.33 mmscmd in 2011-12, 20.88 mmscmd in 2012-13 and 9.77 mmscmd in 2013-14, the Minister said in a written reply to the Lok Sabha. This year, the output has been only 8.05 mmscmd so far, he added.
The total penalty on Reliance Industries for missing the target in four financial years, beginning April 1, 2010, now stands at a cumulative USD 2.376 billion, The Hindu quoted Pradhan, as saying in his reply. The penalty is in the form of disallowing costs incurred.
The Production Sharing Contract (PSC) allows RIL and its partners — BP Plc and Niko Resources — to deduct all capital and operating expenses from the sale of gas before sharing profit with the government, the paper reports.
READ: Oil ministry asks GAIL, CPCL to stop payment to Reliance
In what could be another major blow for Reliance Industries (RIL), oil ministry has directed the company's customers GAIL India and Chennai Petroleum Corp (CPCL) to deposit their next payment for purchase of crude oil and natural gas from the KG D6 basin to the government accounts instead of remitting it to the company in an attempt to recover the government's profit share due from the Mumbai-based company. "GAIL and CPCL have been directed to remit the sale proceed of crude oil/condensate/natural gas from KG-D6 block which falls due immediately in to the government account so as to recover an amount of $115,263,612 at the rate of 50% by each company and deposit the same with government," oil minister Dharmendra Pradhan told the Lok Sabha, in a written reply. Read more
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