The Centre issued a $1.55 billion claim from Reliance Industries and its partners for drawing natural gas belonging to state-owned ONGC in the KG Basin over the last seven years.
The claim is in line with the recommendations of the one-man AP Shah committee set up to look into the matter. The committee’s report recommended that RIL pay the government compensation for extracting natural gas that had flowed from ONGC’s portion of the field to RIL’s side.RIL has said it would seek arbitration under the terms set out in the production-sharing contract.
“The claim of the Government is based on misreading and misinterpretation of key elements of the PSC (production sharing contract) and is without precedent in the oil & gas industry, anywhere in the world,” according to a statement from RIL.
RIL added that the quantification of the amount to be paid was “without any basis and arbitrary” and was not based on any law.
“RIL proposes to invoke the dispute resolution mechanism in the PSC and issue a Notice of Arbitration to the Government,” the company statement said.
Source: The Hindu