Govt imposes $1.55 billion demand on a RIL-BP-Niko

National News

ONGC gas row; Govt imposes $1.55 billion demand on a RIL-BP-Niko

Government has slapped a $ 1.55 billion demand on Reliance Industries and BP and Niko partners for “unjustly enriched” by producing natural gas owned ONGC Crown corporation, a movement that is most likely to land in arbitration.

71 million of royalties paid on the product gas and the addition of interest at the Libor rate 2 percent for a total of 149 USD. The oil ministry on November 3 issued a notice to all three partners seeking USD 1.47 billion British thermal to produce up to 338 222 000 In seven years ended in March 2016

Originally, ONGC had sought to continue the RIL and to demand compensation for the gas that had migrated from its block KG-DWN-98/2 (KG-D5) and Godavari PML in the KG basin in the Gulf of Bengal in neighboring KG-DWN-98/3 (KG-D6) block RIL and produced by the private company.

While RIL and its partners are likely to challenge the claim, it is likely that arbitration will be used, because it is the dispute settlement mechanism established by the PSC to resolve disputes between the government and a contractor private.

The ministry said it had accepted the report of Shah committee and, therefore, “the government has decided to seek restitution in the block KG-DWN-contractor 98/3 for benefits received unfair and unjustly retained by them”.

“The committee concluded that the production of the contractor’s gas migration (RIL-BP-Niko) and maintaining the resulting benefits amount to unjust enrichment, since the production sharing contract (PSC ).

RIL denies knowingly produces a gas belonging to ONGC for every well drilled were within the KG-D6 block and with the explicit permission of the government.